In brief

Rishi Sunak will remain in power until the next general election, which we expect in late 2024. His party is divided and policy is stuck in a holding pattern as the election approaches. We expect the Conservatives to lose, albeit by less than polls currently suggest, with the centre-left Labour Party winning a working majority under Keir Starmer. Investment and the economy will be the dominant issues in the campaign, with growth remaining weak given cost-of-living strains, tight monetary policy and poor external demand, amplified by post-Brexit trade frictions. We expect the UK to be the second-slowest-growing economy in the G7 for the second consecutive year in 2024. Weak public finances and high borrowing costs mean that the next government's scope to boost growth or improve the quality of public services will be limited.

Read more: What to watch in 2024: the UK

Read more: UK PM Sunak reshuffles his government