Political change can move markets in ways that aren’t always immediately obvious, so it’s important to take care when considering which stocks to buy.
Keir Starmer’s decision to resign today (22 June 2026) wasn’t entirely unexpected, so the first reaction in gilts and sterling has been muted.
But the bigger question is: what comes next?
The impact of leadership change
Earlier this year, even the prospect of Labour infighting pushed gilt yields higher and hurt domestically focused sectors such as utilities, banks, real estate and housebuilders. Investors were worried about looser fiscal policy and heavier‑handed regulation.
With Andy Burnham now widely seen as the favourite to take over, markets are trying to assess the impact. His so-called ‘Manchesterism’ views include more devolution, big investment in housing and transport, and tougher public control over water and energy.
In that context, I see three UK names that could benefit if we get political clarity and a credible fiscal stance: SSE, Balfour Beatty (LSE: BBY) and Barratt Developments.
All three have been caught in the crossfire of gilt volatility and policy noise, yet their underlying businesses still look solid.
For now, let me zoom in on Balfour Beatty as an example.
Why could Balfour benefit now?
Its recent numbers show a business already aligned with an infrastructure‑heavy agenda.
The 2025 full year results on 11 March 2026 revealed:
- Revenue of £10,767m, up 8% from £10,015m in 2024.
- Record order book of £22.7bn, up 23% from £18.4bn.
- A 16% increase in underlying profit from operations.
- Average net cash of £1,212m, up from £766m.
- A 12% increase in the full‑year dividend to 14p per share.
Management also announced a £200m share buyback for 2026 and emphasised that the record order book includes over £3.5bn of new UK power generation projects.
In mid‑2025, management spoke about a 10‑year, roughly £20bn order backlog, supported by UK energy, transport and defence projects.
But construction‑sector risks shouldn’t be overlooked: margins are relatively low, projects can overrun, and not every contract delivers profits. With earnings closely tied to government budgets, there’s an ever-present risk from political change.
For now, Balfour looks well-positioned. It’s part of the civil works alliance for the Sizewell C nuclear power station in Suffolk, and has been chosen by Rolls‑Royce as exclusive contractor on nuclear‑licensed infrastructure.
That’s exactly the sort of long‑dated, government‑backed work Burnham says he wants more of.
The bottom line
There’s several reasons Balfour Beatty deserves a closer look post‑Starmer:
- Deep, growing order book tied to UK transport, energy and defence projects.
- Direct exposure to marquee schemes like Sizewell C and defence‑related nuclear work.
- A political backdrop that, at least on paper, favours long‑term infrastructure over short‑term gimmicks.
It’s still early days, and leadership contests can throw up surprises. But if a Manchesterism‑flavoured Labour government doubles down on infrastructure and housing delivery while sticking to fiscal rules, I suspect Balfour could benefit.
Similarly, SSE and Barratt are also worth a look as the political situation unfolds.
The key question now is whether a new PM can convince bond markets — and voters — that they’re able to deliver without losing control of the public finances.
Should you invest £5,000 in Balfour Beatty Plc right now?
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Mark Hartley does not hold any positions in the companies mentioned.
