Client Update - 3rd October 2025

Traditionally, at a Conservative party annual conference, Labour are in the cross hairs for some good old-fashioned bashing, and vice versa at the Labour conference. But these are not normal times, and the 125-year-old ruling party is fighting to maintain its identity as the true representative of the working people, as Nigel Farage and Reform lurk in the background. Let us not get into the definition of “working people” according to our Prime Minister, as I fear the November budget will not be so discerning.

In his efforts to vanquish Nigel Farage, this week Sir Keir Starmer painted Reform UK as a party that’s unpatriotic and whose immigration policies are racist. However, and my thanks to the FT for this, here’s a fun pub quiz factoid that should give the Labour leader reason to pause for thought: Donald Trump ran as an independent for Reform USA in 2000 and was dismissed as a joke. A quarter of a century on, who’s laughing now? Mind you, I am not sure Farage has 25 years left in him.

Trump and Farage both came of political age in 2016 under a populist wave. One became American President, the other helped achieve Brexit, but since then Farage has still struggled to get taken seriously. That has subsequently changed as Farage adopted Reform as his latest political incarnation. Opinion polls now show him as the most likely candidate to be the next Prime Minister. This was underlined when US Vice-President JD Vance didn’t bother to meet Conservative leader Kemi Badenoch this summer but made time for Farage.

Farage is borrowing from US politics and quite cleverly framing local elections in the UK in May 2026 as midterms, a key test of the incumbent party on the other side of the pond. Starmer may be in “a fight for the soul” of the UK, as he told this week’s Labour party conference, however I am afraid he must start to realise that it is Farage who is choosing the terms of the battle ahead.

Interestingly, the people that Farage decided to let speak on his behalf at the Reform party conference appear to have been immediately forgotten about (remember “Covid vaccines gave our Royal Family cancer” – and all that ridiculous commentary), I am afraid our Prime Minister does not have the same luxury. This week Rachel Reeves, the Chancellor, reminded us how hated Labour are about to become. To justify her second round of tax increases, which she had promised would never come, Rachel Reeves says that “everyone can see in the last year the world has changed.” We are not sure everyone can. If she means the Ukraine war, it has been going on since 2022. The Israel-Gaza crisis since 2023. The inflation problem predates Labour, as does the rise in global borrowing costs.

What has changed, then? The re-election of Donald Trump? The subsequent trade strife? Both events should have been anticipated. Trump was leading the US presidential polls when Labour entered office and tariffs are the one thing he has extolled throughout his time in public life.

Previously Reeves has said that growth would remove the need for further tax rises but then decided to tax business via National Insurance and then this was passed onto the aforementioned “workers” and therefore hit UK growth, rather than promoted it.

If Starmer wants a chance to go again at the next elections, he must heed the US evidence. Trump won the White House amid the economic growth of 2016 and 2024. He lost in the pandemic-induced recession year of 2020. Growth is key. In Britain, where voters shop around and change their minds every five years, Starmer was a joke as late as 2021 and a landslide-winner in 2024. Whether this makes us the most temperamental or the most coldly rational people in the world, it means that polls are transient. It just cannot be stressed enough what an eternity four years (the remaining span of this parliament) is in the UK.

There still remains a likelihood that it will be intense buyer’s remorse about Labour that thwarts them at the next election, than a fear of what Farage might do to the country, that may bring people back to the centre and consider the Conservative’s once more, despite how deluded this sounds today. Whatever may or may not happen, we are pleased to see markets continuing to make good progress as we await the budget around the corner. I heartily suggest that until then you try not to read too much about what may or may not be about to happen and instead focus on the here and now. Enoy yourselves and your families and please, do have good weekend.