The instability in UK politics has negatively impacted the country’s reputation for financial stability, according to John Neal, CEO of insurance giant Lloyd’s of London. Speaking to the BBC he said the high turnover of prime ministers and a mini budget, which resulted in a drop in the pound’s value and an increase in mortgage rates, have damaged confidence in the UK.
“All of them don’t help us because I think we had huge credibility around stability and certainty,” he told the broadcaster. “And I think what we need to do through 2023 and 2024 is begin to rebuild that stability.”
Neal believes the government can regain its credibility by working with the business sector to stabilise the economy. The government has responded by saying it has taken measures to restore stability, but Lloyd’s of London is aware of the impact of the UK’s reputation on its own standing as the world’s largest insurance market.
“We’re at an important moment. We’ve really got to re-prove our value proposition, I think there’s a responsibility on government and us in business to get it right,” he said. “I think we can get it right but we have got to work hard.”
In September 2022, the UK’s reputation was further impacted by a £45 billion tax cut announcement by then-Prime Minister Liz Truss and then-Chancellor Kwasi Kwarteng, which led to market turmoil, a drop in the pound’s value, and an increase in government borrowing and mortgage rates. Other factors that have damaged the UK’s reputation include the multiple changes in leadership in 2022 and the additional costs associated with Brexit.
Neal emphasised that the UK should not take its position as a global financial centre for granted and called for government and business to work together to rebuild stability and credibility in the coming years. The government stated it has made “difficult decisions” to restore economic stability and is focused on reducing inflation, debt, and growing the economy. A spokesperson added that the government is also working to reform EU-era insurance rules that could bring over £100 billion in investment.
John Neal was appointed CEO of Lloyd’s in October 2018, when he replaced Inga Beale. Previously he was group CEO at QBE.
