Global Macro Research
Macro BytesDoes politics matter for markets? - with Jens Larsen of Eurasia Group
Political risk is reshaping global markets. From the UK’s challenges to US policy shifts, uncertainty is rising. What does this mean for investors and economies?
Authors
Luke Bartholomew
Deputy Chief Economist
Lizzy Galbraith
Senior Political Economist
Duration: 42 Mins
Date: 12 Feb 2026
US and global politics are reshaping the economic landscape, making geopolitics a fundamental factor for markets and investments.
Hosts Luke Bartholomew and Lizzy Galbraith are joined by Jens Larsen, Practice Head of Geoeconomics at Eurasia Group, in a broad-ranging conversation exploring why political risk matters now more than ever.
Some highlights:
Some highlights:
- Political volatility is rising: The world is objectively more politically risky, with structural changes making politics a key driver for markets. Geopolitics is now as fundamental as economics or climate change.
- The “depoliticisation” era is ending: For decades, markets could largely ignore politics. Now, governments are more interventionist, expanding national security and actively influencing supply chains, manufacturing, and defence.
- Global and domestic pressures: The shift is driven by the end of the ‘unipolar’ world order, US-China competition, and the rise of populist politics. Governments are under pressure to respond to both voter concerns and strategic challenges.
- Traditional risk tools are less reliable: Polling and betting markets have struggled to predict outcomes, making scenario thinking essential despite the wider range of possibilities.
- Politics and markets interact: Political events can move markets, but market reactions also constrain political action. Recent examples include US tariff policies and the UK’s fiscal strategy, where asset prices have shaped government decisions.
- UK in the spotlight: Once seen as stable, the UK now faces political turbulence, with rapid shifts in polling and speculation about leadership changes. Fiscal strategy and market reactions are central to the debate.
Listen to the full discussion on Macro Bytes:
