How will Labour impact your investments? Stats show which PMs have been best for markets since 1970

Although the Conservatives are perhaps thought of as the party of big business, it is in fact Labour that have been in power when the UK market gave its largest returns.

Investments platform Investing Engine crunched the numbers since 1970 and found UK plcs made annual returns of 10.83% during Labour's premiership.

This is compared to 5.29% under the Tories.

However, because the Conservatives have been in power for longer during this time, £100 cash would be worth more under the Tories if someone only invested during one of the party's rules.

A £100 investment during the Conservatives' 36 years in power would have grown to a cumulative £4,902, while that same £100 would have grown to just £447 under Labour's 18 years, according to Investing Engine.

Had that same £100 been kept in the stock market through all political regimes, it would be worth £21,893 today, Investing Engine says.

The platform has ranked all prime ministers since 1970 by estimating the total return generated on the UK stock market during their tenure, and the average annual return.

Despite the Conservatives' Rishi Sunak being in power as the UK flirted with recession, he actually delivered a 24% return on investments during his time as Prime Minister.

His 13% annualised return dwarfs that of Boris Johnson who only boosted markets by an average 3% a year, or 10% during his three year premiership (in comparison, Rishi Sunak was in power for 21 months).

However, the top performing prime ministers for annual returns were Labour's Harold Wilson and Jim Callaghan, with markets growing 20% during both their terms in office. The FTSE 250 rose as much as 1.8% on Friday, July 5, after Labour won the election, its highest level since April 2022.

Andrew Prosser, head of investments at InvestEngine, said: "The data shows that a Labour government is more than twice as 'friendly' to UK businesses, with returns of almost 11 per cent compared to just over 5 per cent under the Tories.

"Of the 13 prime ministers we've had since 1970, just four have been Labour versus nine Conservatives, but when it comes to annualised returns, the top two performing prime ministers are Labour."

The data is based on the MSCI UK net total return in GBP between June 1970 and July 2024. It measures the performance of large and mid cap segments of the UK market.

It shows that while Margaret Thatcher delivered a total return of 488% during her time as Prime Minister from 1979-1990, this only delivered an average annualised return of 17%.

It was a similar story for John Major's 159% overall return that equated to 16% annually during 1990-1997.

Gordon Brown was the worst performing Labour leader for the markets. The former Chancellor led the UK through the banking crisis and credit crunch with markets plunging 3% annually.

David Cameron had better success during his coalition with the Liberal Democrats than he did when leading solo. His 9% annual returns with Nick Clegg between 2010-2015 were slashed to just 1% during his 2015-2016 premiership.

While investors may be hoping Keir Starmer may bring good luck to the markets, Mr Prosser said: "For any investor, the biggest asset you can have is time; the longer your cash is invested, the more time it has to grow. Time in the market also gives portfolios the chance to benefit from the wonders of compounding interest."

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