- New PM Andy Burnham pledged a 'new economic model' and a 'cost-of-living government'.
- Hedge funds have ramped up short bets, with disclosed positions surging fivefold in the first half of 2026.
Hedge funds have significantly increased their short positions against U.K. stocks, with a fivefold rise in disclosed bets in the first half of 2026. This trend coincides with Andy Burnham's recent appointment as Prime Minister, where he has committed to a 'new economic model' aimed at addressing the cost-of-living crisis.1234
In his inaugural address, Burnham outlined a 10-year plan to reindustrialize Britain, focusing on making housing and utilities more affordable. He emphasized the need for a 'cost-of-living government' to tackle rising expenses that have burdened many citizens. As part of this initiative, he announced plans to eliminate sales tax on household electricity, aiming to provide relief for families struggling with energy costs.
The surge in hedge fund short-selling reflects growing concerns about the U.K. economy, particularly in sectors like homebuilding and construction, which have seen significant short positions of 16% and 13%, respectively. Analysts have noted that while Burnham's leftward shift in policy has raised eyebrows among investors, his choice of a finance minister perceived as a 'safe pair of hands' has somewhat reassured the markets.
Despite the challenges, there are signs of economic recovery, with growth and rising productivity indicating potential value in U.K. stocks. Investors anticipate increased takeover activity as foreign firms seek to capitalize on the current market conditions, often paying record premiums for U.K. assets.
“Disclosed short positions against UK-listed stocks surged to 27 companies in the first half of 2026, up from just five a year earlier. Burnham's inaugural speech included a pledge to end rough sleeping and a 10-year plan to reindustrialize the country, with housing and utility affordability as key pillars.”
CNBC
