![\"\"](\"https:\/\/dailybusinessgroup.co.uk\/wp-content\/uploads\/2026\/06\/Joe-Aylott-iphone.png\")
Markets will take the change of prime minister in their stride because Andy Burnham will face the same constraints as Sir Keir Starmer, says a senior asset manager.<\/p>\n
The change in Downing Street is likely to create some short-term volatility in UK assets, but the market does not expect a significant shift in economic direction.<\/p>\n
Joe Aylott, multi-asset strategy director in the investment business at private bank Coutts, part of NatWest group, said the markets would be seeking some early clarity on policy from the new PM \u2013 almost certain to be Andy Burnham \u2013 and who the next Chancellor will be.<\/p>\n
However, his arrival in Number Ten is not expected to result in any sharp diversion in economic strategy, despite suggestions he may want to hit the wealthy with higher taxes and raise borrowing targets. <\/p>\n
Speaking to Daily Business<\/em> in Edinburgh during a tour of clients in Scotland, Mr Aylott said: \u201cFor us, looking at how assets may perform over the next 12 to 18 months, the impact [of a change of PM] may not be as significant as you may think. <\/p>\n \u201cThe reason for that is that Andy Burnham is going to face some of the same constraints that Sir Keir Starmer faced. Inflation has been above target for a few years, government debt is high. <\/p>\n \u201cAndy Burnham will want to change something. We don\u2019t know what is policy agenda or his top team will be. But the big factors driving the UK economy, particularly those that investors are about, which are effectively growth and inflation and things like that\u2026 I don\u2019t see any change in those as a result of what has happened in the last week.\u201d<\/p>\n Mr Aylott believes that despite some clear issues facing businesses, the UK economy remains robust and has been able to withstand the shock of conflicts in Ukraine and Iran. <\/p>\n \u201cGrowth has been quite resilient in the UK to what has been thrown at it over the last few years. We have faced a few challenges, many of them external, like Ukraine.\u201d<\/p>\n As such he does not expect the changes in personnel in Downing Street to result in much divergence in strategy by wealth managers.<\/p>\n \u201cWe think changes in the kinds of policies that investors really care about are not going to be hugely significant in the near term,\u201d he said. \u201cFrom a market perspective it should be quite manageable. Gilt yields have fallen and the market reaction has been quite muted.\u201d<\/p>\n He said the markets had long priced in high debt levels and the cost of servicing it.<\/p>\n \u201cOur clients ask a lot about debt [as a proportion of GDP]. It is not unique to the UK but nonetheless it is still something any politician has to consider given that borrowing is part of any government\u2019s plans.<\/p>\n \u201cThere are lots of demands on government linked to ageing populations, defence spending. They are not likely to go away any time soon.\u201d<\/p>\n Because of lower expectations of interest rate cuts, Coutts has recently eased back from equities and into bonds, he said. \u201cWe have been overweight in equities for some time and we have moderated our conviction on that a couple of weeks ago. <\/p>\n \u201cThe last couple of years have been characterised by strong global economic growth and also central banks that are cutting interest rates.<\/p>\n \u201cWe are now moving into an environment where economic growth is still strong, but you will not have that additional tailwind of rate cuts. For us that warrants a slightly more moderate equity overweight.\u201d<\/p>\n Asked about a possible market bubble that might be about to burst, he said: \u201cWe are definitely cogniscent of those risks and it something we discuss, but we don\u2019t believe the global equity market or US market is in a bubble. We think this is a market over the last years or so which has been driven by really strong fundamental earnings growth.<\/p>\n \u201cA bubble is where the markets are detached from reality and fundamentals, and that is not what we see.\u201d<\/p>\n He said the strong growth in tech stocks remains sustainable. Coutts was turning its attention to emerging markets, particularly in Korea and Taiwan which have become a larger part of that universe.<\/p>\n In terms of client growth, the firm saw entrepreneurs as a key part of the business and they benefited from being part of the NatWest banking group. Combining with Evelyn Partners, following the recent merger, will broaden the range of products offered to clients, he said.<\/p>\n He said advances in technology \u2013 artificial intelligence \u2013 was an \u201copportunity\u201d and allow the bank to deliver more products to clients. \u201cClearly, it will create changes in roles,\u201d he said.<\/p>\n \t <\/div>\n![\"Andy](\"https:\/\/dailybusinessgroup.co.uk\/wp-content\/uploads\/2026\/06\/Andy-Burnham-taking-the-oath-as-MP.png\")