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In this week’s newsletter:
- Top FTSE 100 Dividend Paying Stocks
- Will Andy Burnham Raise Taxes?
- Why Strategic Buyers Are Targeting UK Companies
- Which European Stocks Powered the Bumper Q2 Rally?
- Why This Top Fidelity Manager Won’t Buy the FTSE’s AI Stocks
- The Best and Worst Investment Trusts in Q2
- Best- and Worst-Performing UK Stocks
- Tank Maker KNDS Delays €12 Billion IPO as Defense Stocks Retreat
In the second quarter of this year, markets were worrying what an Andy Burnham-led government would look like. They will find out for real this month. Burnham isn’t yet confirmed as Labour leader, and must win an official contest to take the keys to Number 10, but it’s looking increasingly likely that there will be an “orderly” transition of power. For now, bond markets are steady enough, but that could change. This week, we ask if the former Manchester Mayor will raise taxes.
Current chancellor Rachel Reeves has already raised taxes in both of her 2024 and 2025 Budgets. It’s difficult to see how a third go would end well. Given Burnham has committed to Labour’s original 2024 manifesto policy of not raising the headline rates of income tax, National Insurance, and VAT—as well as the state pension triple lock—it’s safe to say the pain has begun before his tenure has even started.
From questions to the facts, this week’s newsletter has a great array of analysis and information. Check out our latest list of top FTSE 100 dividend-paying stocks, the best- and worst-performing UK stocks, and James Gard’s look-back at the best- and worst-performing investment trusts in Q2.
With Q3 earnings season now around the corner, we’ve also updated our monthly guide to the top FTSE 100 dividend-paying stocks, highlighting the biggest upcoming income announcements. GSK GSK, Unilever ULVR, HSBC HSBA, and Diageo DGE are among the blue-chip names investors will be watching closely over the coming weeks. Joining in the retrospective is Karen Gilchrist, whose analysis of the European stocks that drove a bumper Q2 rally on the continent is available to read here. Looking forward, Valerio Baselli is back with another healthcheck on the US dollar, while Antje Schiffler reports more on defense giant KNDS’ delayed IPO.
Back in the UK, delayed IPOs are also a concern. As a debate rages over whether the amount of mergers and acquisition activity is actually good for the health of the overall stock market, one top fund manager points the finger squarely at the lack of IPOs on the UK stock markets. Gold-rated Fidelity Special Situations fund manager Alex Wright joined us in the Morningstar UK studio and says UK M&A activity is great for investors in the short-term. But his thoughts chime almost perfectly with those of fellow fund manager Clive Beagles, who tells Christian Mayes that, at the current rate of M&A, there won’t be a stock market left in a decade. I put this to Alex Wright when he joined us and he didn’t disagree. He thinks the problem lies in the lack of flotations, and no serious UK investor could possibly disagree with that. Deliveroo investors will certainly concur.
Next week we’ll take a look at all the runners and riders for the role of Andy Burnham’s chancellor, and how the coming months could affect your personal finances. We’ll also look at the next steps for UK interest rates now that Bank of England governor Andrew Bailey has said rate cuts are “off the table” at the Bank’s July meeting.
Ollie Smith, Senior Editor, Morningstar UK
