Letter from London 2026

Commentary # 33 by Paul Francis

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When I posted my first Letter from London on January 8, 2025, UK Prime Minister Keir Starmer and his Labour government were in their sixth month in office, having swept the Conservative Tory Party out of government for the first time in 14 years, and appearing to have a strong public mandate with a 174-seat majority in Parliament. Donald Trump had not yet been inaugurated and had a 46% approval rating after having routed Democrats in the 2024 election. Closer to home, an obscure state Assemblyman named Zohran Mamdani was polling at about 1% among the candidates in the Democratic primary for New York City Mayor.

What a difference 16 months makes in politics.

These days, Prime Minister Starmer, a cautious lawyer, is widely viewed as having been ineffectual in office. His popularity began to wane after he introduced his first budget in late 2024, which included tax increases and benefit reductions that were necessary to comply with the UK’s strict Budget guidelines.  He ultimately reversed course on many of these unpopular proposals, but his favorability ratings continued to fall. As of this writing, he faces a genuine political crisis due to a scandal involving his appointment of Lord Mandelson, a close friend of Jeffrey Epstein, as ambassador to the United States.

If the Labour Party suffers severe losses in the upcoming local government elections on May 7, as most expect, the calls for Starmer’s ouster by rivals within the Labour Party will become even louder. Meanwhile, support for the new Reform UK Party, led by Nigel Farage (often described as the Donald Trump of the UK), continues to surge and now leads both the Labour and Conservative Parties in national polls.

Donald Trump, in just 16 months, has been anything but ineffectual, breaking all norms and creating an imperial presidency of unprecedented authority. But with the exception of Trump’s success in closing the Southern border, most of his unilateral actions have proven unpopular, including tariffs, the militarization of immigration enforcement, and now an unpopular war of choice in Iran. Trump has lost Independents and other parts of the political center on nearly every issue and faces political repudiation in the midterm elections this November.

Zohran Mamdani galvanized a political movement based on the issue of affordability and populist resentment to score a stunning electoral upset and become the Mayor of New York City. While he remains popular, using his exceptional talents on social media to bypass criticism from the mainstream media, much of his political agenda withered after its first encounter with reality. Mamdani has been forced to reverse his positions on a striking number of his campaign promises. He remains politically hostage to the New York State legislature and governor, who must approve most of the policy changes that are necessary not only to advance his agenda but to allow him to avoid politically unpopular New York City property tax increases (one of the few tax levers within his authority) or spending cuts.

My first Letter from London (where my wife and I now spend six months of the year) was framed around comparing policy conditions in New York and the US to the six “milestones for progress” included in Keir Starmer’s “Plan for Change.” These milestones included goals for raising living standards, building more housing, reducing National Health Service (NHS) waiting times, hiring more police, advancing clean energy, and improving early childhood outcomes. The US, and New York in particular, were addressing the same issues, but with interesting differences in nuance and emphasis.

Sixteen months later, these goals continue to dominate the programmatic focus of government. But despite the mandates with which they were elected, none of these three leaders has been able to improve their economies or their voters’ standard of living, which was the most salient issue on which each of them was elected. As a result, discussion of the high-minded programmatic goals of each of these leaders now tends to be drowned out by a deepening malaise about the economy and growing political and social polarization.

Rather than update my discussion of the similarities and differences on the major programmatic issues in the UK, the US, and New York, I thought I would use this Commentary to explore the phenomena of economic malaise and polarization on both sides of the Atlantic, which are two of the most significant underlying currents that run in parallel with the programmatic work of government. I find both the similarities and differences between the UK and the US (and sometimes specifically New York) as they relate to these economic and social currents to be illuminating and interesting. For our readers who come to these Commentaries for discussion of New York State politics and policy, I appreciate your indulgence of this digression on wider issues.  

Economic Malaise

James Carville’s cardinal rule in the 1992 presidential election was to remember, “it’s the economy, stupid.” Although many other factors are at play, the conventional wisdom of political observers is that the single most important factor leading to the election of Donald Trump and Keir Starmer was the economy, which, by the time of Zohran Mamdani’s election, had been rebranded as “affordability.” The common denominator in all three elections was the real or perceived deterioration in the standard of living of the middle class.

However, this phenomenon of economic malaise is experienced differently in the UK and the US. In the UK, the economic challenge is mostly framed in terms of the lack of economic growth, whereas in the US the challenge is framed in terms of affordability. Americans experience the malaise as "wages are up but I can't afford eggs and rent." Britons experience the malaise as "I got a pay rise and somehow have less money at the end of the month."

The Living Standards milestone in Starmer’s Plan for Change used the metric of Higher Real Household Disposable Income per person and GDP per capita by the end of the current Parliament in 2029. This metric looks at average household disposable incomes after housing costs and taxes, which, according to the Joseph Rowntree Foundation, remained £400 a year below 2020 levels in April 2025. Nearly six years after the 2019 pre-COVID baseline, the typical British household was still poorer in real terms.

Self-inflicted wounds are always the most painful, so what salts the wound of economic malaise for many Britons is the role of Brexit, which was approved by just under 52% of voters in 2016 and became effective in 2020. Economists estimate that divorce from the EU has resulted in a cumulative reduction in the UK’s GDP of 5%-8%. Depending on how realistically the question about rejoining the EU is phrased, as little as 36% or as much as 63% of British voters say they would support rejoining the EU. The relatively small percentage of British voters who say they would vote to rejoin the EU when non-economic trade-offs are included in the question is a reminder that elections are not always only about “the economy, stupid.”

Another difference between the US and the UK in terms of the economic malaise is that while many middle-class Americans experienced an increase in wealth between 2019 and 2025, that is not the case in the UK. Property wealth in the UK has grown at a slower rate than in the US, and far fewer Britons saw their wealth increase through direct or indirect participation in the stock market. Roughly 58% of US households own stocks directly or through retirement accounts such as 401(k) and IRA accounts. In the UK, direct household share ownership has collapsed over decades, from around 28% of the market in 1981 to roughly 11% today. Although private sector pensions in the UK have shifted closer to the defined contribution model that prevails in the US, most UK pension wealth continues to sit in defined-benefit plans where market gains accrue to the plan rather than increasing benefits to the member.

In the US generally, it is often said that the most salient fact of voters’ perception of how well they are doing is the fact that prices for a basket of goods are typically 20%-25% higher today than they were in 2019. The increase in real wages that offset the impact of inflation was very unevenly distributed. Similarly, the significant increase in wealth from real property appreciation and stock market participation since 2019 is disproportionately spread among people over 45 and those who were relatively well-off to begin with. In New York City, in particular, market-rate rents for new apartments have increased by roughly 30% to 40% since 2019, and home prices are out of reach for the middle class, exacerbating the sense of resentment among younger, striving middle-class voters.

This feeling and populist resentment – particularly among younger generations – that life is increasingly unaffordable for the middle class helps to explain the Zohran Mamdani phenomenon in New York City. Mamdani won 70% of the vote among voters 18-44, but his opponent, Andrew Cuomo, won 52% of the vote among those 45 and older.

In both the US and in the UK, I have come to believe that the disconnect between the scale of people’s economic problems and the power of government at any level to address them has become perhaps the most significant driving force in politics. A comment replying to a recent Substack post by Paul Krugman on the so-called “vibecession” expressed this disconnect well, saying:

“[T]he American problem today…is about a widening rupture between state capacity and social expectations. If a country cannot deliver sustained improvement in the most basic interfaces of daily life – housing, energy, healthcare, infrastructure, and industrial employment – then even if Wall Street performs well, GDP looks respectable, or certain advanced industries continue to thrive, ordinary people will increasingly stop believing the claim that the economy is doing well. In that sense, so-called ‘vibes’ are not superficial at all. They are a collective referendum on state capacity, on the structure of resource allocation, and on the stability of future living standards.”

Political and Social Polarization

Although many people thought that America could hardly become more polarized than it was when Donald Trump was elected for a second time in 2024, the actions of the Trump administration and the behavior of the President and many members of his cabinet have brought political and social polarization to a new level. In addition to the split between MAGA Republicans and nearly all Democrats, a schism has arisen within both political parties as it relates to support for or opposition to policies of the State of Israel. This schism remains at the margins of the Republican Party but has already become a divisive and politically dangerous litmus test issue for Democrats.

When I wrote my first Letter from London in January 2024, my wife and I often remarked at how much less polarized the UK seemed compared to the United States. We knew that the 2016 Brexit referendum had divided the country on class and regional lines that were not dissimilar to the rise of the MAGA movement in the US, but you weren’t reminded of it on a daily basis. There is no equivalent to Fox News in the UK, and there is a much smaller presence of highly partisan podcasters in the UK who thrive on controversy and division. In the UK, there continues to be a level of civility in the press and among elected officials that reminds us of a bygone era in the US.

For example, it seems inconceivable that the current fad among US politicians to curse like sailors in their public remarks will spread to the UK. I recently attended a talk in London by the former Archbishop of Canterbury, who expressed disbelief about this development, noting that the British would find such language “deeply suspicious.”

The civility for which the British are famous may prevent the naked hostility between political tribes that we see in the US. Nevertheless, not yet two years after the landslide election of the Labour Party, the relatively staid two-party competition between Labour and the Conservatives in British politics has fragmented into at least four parts, which roughly mirror the split between MAGA and the remaining Establishment Republicans in Congress and the split between Progressive and Establishment Democrats.

Nigel Farage's Reform UK Party (often compared to MAGA) is now leading national polls, even though the Conservative Party is still the dominant opposition party in Parliament and generally advances conservative positions that are comfortably within an establishment framework. The Green Party is surging as a progressive alternative to the Labour Party, which, as the incumbent party in power, carries all the baggage of the unpopular status quo. In addition, local parties are ascendant in Wales and Scotland, which, along with the smaller existing Liberal Democratic Party and the new movement formed by the leftist former Labour Party leader Jeremy Corbyn, will complicate elections in the years to come.

There are many similarities between MAGA and Reform UK. Both movements are personified by a charismatic leader, galvanized by strong opposition to immigration above all else, oppose both “woke” politics and establishment elite, and reject ambitious climate change policies. But there are also many important differences, beginning with greater respect by Reform for traditional norms. For example, Nigel Farage has alienated MAGA supporters such as Elon Musk by refusing to embrace fringe right-wing figures of the type that Trump normalizes. Farage now even seeks to distance himself from Trump – saying he knows Trump only in the “by the by” – in the wake of the war in Iran, which is deeply unpopular in Britain across the political spectrum.

Reform also places less emphasis on the Christian nationalism that increasingly characterizes MAGA, doesn’t demonize the professional civil service as a “deep state” that undermines elected conservatives, and continues to support the National Health Service as a quintessentially British institution. Even though some of Reform’s positions on immigration, such as proposals to abolish Indefinite Leave to Remain (the UK equivalent of a Green Card) and to re-review all asylum claims granted in the last five years, are more extreme than MAGA, the combination of Reform’s civility of language when it comes to both their political opponents and the description of the migrants themselves, makes it seem less threatening than the party’s policy positions would suggest.

Meanwhile, the Green Party has grown from a niche movement focused on the environment to a progressive alternative to the Labour Party. Its policy manifesto calls for a wide range of progressive economic and social policies, including a wealth tax, substantial increases in spending on social services, and replacing the House of Lords with an elected second chamber. Although a March 2026 poll by YouGov (a widely respected UK polling organization) showing the Green Party outpolling Labour by five points may somewhat exaggerate its ultimate electoral strength, there is no question that the Green Party is now a major force in British politics that will compete for traditional Labour voters.

An important catalyst for the rise of the Green Party has been its denunciation of Israel over the war in Gaza and strong support for Palestinians. At the Green Party conference in 2024, resolutions recognizing Israel's conduct as both "apartheid" and "genocide", a full arms embargo on Israel, and calling on the UK to formally apologize to the Palestinian people for the 1917 Balfour Declaration, were all passed with a large majority.

Indeed, one of the most noticeable changes in the UK I have found since we first began staying in London in October 2023 has been a striking rise in anti-Semitism and the vehemence of opposition to Israeli policies. Although anti-Semitism and anti-Israel sentiment have been increasing in the US as well over the last 16 months, I think observers on both sides of the Atlantic would agree that this phenomenon is much stronger in the UK.

Anti-Semitic violence in the UK is now a relatively common occurrence. A few days ago, after the third attack within London on a Jewish building or place of worship in a week, Sir Ephraim Mirvis, the Chief Rabbi of the United Hebrew Congregations of the Commonwealth, declared the incidents a “sustained campaign of violence and intimidation” against British Jews, which he said was “gathering momentum.”

As for other sources of social polarization, notwithstanding the nascent but growing movement of Christian nationalism in the US, the prevailing ethos continues to be that America is the story of immigration and assimilation. Although race continues to be an irreducible factor in American life, polling suggests that at least two-thirds of Americans continue to believe that the American identity is an idea based on a set of values rather than ethnic or religious background.

The nature of British identity is more complex. Although a slight majority of Britons define British identity in terms of civic values, a somewhat larger percentage than in the US define identity in terms of ethnic and birthplace nationalism. In part, this may be because the UK does not share America’s founding mythology as a haven for newcomers looking for a better life, and the UK lacks documents such as the Declaration of Independence and the Constitution that help define the national identity in abstract terms.  

In contrast to the US Constitution, with its strict First Amendment separation of church and state, under a parliamentary action dating to 1546, the British monarch is by law the head of both the State and the Church of England. As a nod to the increasingly multicultural UK, King Charles, when still heir apparent, at one point mused about changing his legal title from “Defender of the Faith” to “Defender of Faith,” although this change never advanced. Certainly, supporters of both MAGA and Reform constitute the core of each nation’s adherents to the belief in the centrality of their countries’ Christian heritage, as well as ethnic and birthplace nationalism. Their rise (or fall) will have significant implications for beliefs about national identity in the future in both the US and the UK.

An important difference between the nature of polarization in the US and the UK involves the related but distinct issues of the recent immigrant population, on the one hand, and race, on the other hand. With respect to immigration, assimilation is a central issue. The largest recent immigrant group in the US is the Hispanic population, which now accounts for 20% of the total US population. One rarely hears that the problem with this group is that it resists assimilation. Indeed, the recent observation is how much more socially conservative the Hispanic population is compared to many Americans, as evidenced by their increasing support for Republicans in the 2024 elections.

By contrast, the Muslim population, drawn from diverse ethnic backgrounds but concentrated among Middle Eastern and South Asian communities, accounts for approximately 6.5% of the total UK population. Particularly in northern industrial cities with concentrations of South Asian Muslim immigrant populations, the immigrant and British-born populations continue to lead what government reports have described as “parallel lives,” with limited interest in assimilating. In addition to this social phenomenon, since the beginning of the war in Gaza, the overwhelming rejection by the Muslim community of the Labour Party’s support for Israeli policies has led to what may prove to be a decisive shift in electoral support away from their traditional support for Labour.

Muslim communities have faced a surge of violence from the right in recent years, triggered by Islamophobia and sparked by specific incidents. In 2024, an attack on a dance class in northern England by a British-born teenager, which was inaccurately attributed to a Muslim asylum seeker, resulted in targeted attacks on mosques, Muslim communities, and others across 27 towns and cities. Beyond these nativist attitudes, Nigel Farage has stated that British Muslims "do not subscribe to British values," and some Conservative members of Parliament make a more nuanced argument that while Muslim traditions should be respected, “Islamist” expressions need to be resisted.

Most Britons acknowledge that racism exists, but racial identity seems to play a smaller role in British life than is the case in the US. The current leader of the Conservative Party is of Nigerian descent and was raised in Nigeria before returning to the UK (where she was born) at the age of 16. The last Conservative Prime Minister was of Indian descent. The current Labour Deputy Prime Minister and former Foreign Secretary is of Black Caribbean heritage, which is taken for granted here. In contrast to Colin Powell and Condoleezza Rice being held up in the US as evidence of racial progress, British political culture is more resistant to the framing of racial representation as evidence of social progress. Perhaps because the UK’s racial minorities came to the UK voluntarily (as opposed to arriving on slave ships), there is much less focus on “structural racism” in the UK than is the case in the US.

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There is much to learn about the US by comparing its experiences and conditions to life in the UK. There are many ways in which the UK could benefit from being more like the US, including entrepreneurial capitalism and (with notable exceptions mentioned above) a stronger culture of openness and egalitarianism.

But at the moment, I would say that the US would benefit far more by emulating Britain, perhaps especially in its basic civility in both politics and general discourse. In this and other social trends, life in the UK seems more positive than in the US. Among many examples, some in the UK may be nostalgic for an aristocratic past, but in reality, there is much less wealth in the UK than in the US today. The explosion of wealth and the extent of income inequality in the US is a recent phenomenon symbolically reflected in gated communities (in fact and spirit) and by the undeniable fact that the wealthiest Americans have undue influence in politics – a practice that degrades democracy in the US but by comparison is barely present in the UK.

“Two great peoples, divided by a common language,” as George Bernard Shaw put it. It is a privilege to have the opportunity to live in both places.