Labour endured a disastrous result to the European elections over the weekend, with both the Brexit Party and Liberal Democrats securing more MEPs than the left-wing opposition party. Final results show Labour managed to secure only 10 seats – or 14.6 percent of the total UK share – compared to the Brexit Party, who managed 29 seats, while the Lib Dems were on 16. Speaking after the final numbers came in, Mr Corbyn was accused of now having a “fudged” position on Brexit after vowing to back a second referendum on any deal, despite previously claiming this was only being kept as an option. The Labour leader said he was “listening very carefully” and added that while a general election would be the party’s preferred outcome, any Brexit deal “has to be put to a public vote”.
Nigel Green, chief executive of deVere Group, said markets would welcome a second referendum, but warned any positive impact of this would likely be offset should Mr Corbyn get into power.
He claims some investors are fearing the socialist agenda being laid out by Labour and the impact this will have on the economy, including plans to nationalise the rail, water and postal industries.
Mr Green said: “A second referendum would likely be welcomed by financial markets for two reasons.
“First, it gives MPs a clear, unequivocal message either way, breaks the grinding deadlock, and reduces ongoing uncertainty.
“And second, it would increase the chances of a softer Brexit, which would have the effect of producing a relief rally in Sterling, UK financial assets, and also a spurt in economic activity in Britain, as delayed household and business spending is unleashed.”
Mr Green added: “A confirmatory vote of this kind will likely prove to be an appealing option for much of the electorate in the UK.
“Therefore, Mr Corbyn’s new approach will in the eyes of many voters make his Labour party more electable in a general election than it has been in a long while.
“And this prospect could spook financial markets.
“As such, any positive impact of a second Brexit referendum on financial markets would be offset by a win by Jeremy Corbyn’s Labour party.”
His sentiment was shared by Jasmine Whitbread, chief executive of London First, who warned investors are on edge over concerns Labour could “scare away” private sector investment.
She said: “Business has been focused on contingency planning for Brexit but a future Labour government is being added to the agenda.
“Labour’s intention to invest in housing and infrastructure is seen as a good thing by many but there’s real concern that the party could scare away much-needed private sector investment.”
Earlier this month, Mr Green claimed his clients are telling advisers that they fear the damaging impact of a Corbyn-led government more than Brexit.
He added that more customers are seeking advise on how to protect their wealth with overseas projects.
Mr Green: “More and more of them are seeking advice on established, legitimate overseas opportunities to create, build, and importantly, protect their wealth.”
The Labour Party has been contacted for comment by Express.co.uk.
Speaking on plans to nationalise energy networks across the UK, shadow business secretary Rebecca Long-Bailey justified the move as stopping customers being “ripped off” by the privatisation of the section.
She said: “It’s an insult and an injustice to our people and our planet for companies operating the grid to rip customers off, line the pockets of the rich and not invest properly in renewable energy.”
But energy firms have spoken out against the move, claiming it will cost customers more money in the long-run.
Severn Trent, one of the biggest water companies in Britain, said: “Any associated changes in government policy may fundamentally impact our ability to deliver the group’s strategic objectives, impacting shareholder value.”