Mette Frederiksen has finally pieced together a governing coalition in Copenhagen, and the City of London is quietly relieved. For weeks, the uncertainty of Danish politics had been a minor but irritating background risk for investors who value predictability. Now, with a centre-left alliance in place, the UK can count on a steady partner in Northern Europe.
This matters more than the headlines suggest. Denmark is not just a source of bacon and Lego; it is a significant trading partner and a fiscal conservative in the European context. Frederiksen’s government is expected to maintain a tight grip on public spending, a refreshing change from the continent’s usual drift towards profligacy.
For British exporters, this means a stable currency and continued demand. For the Treasury, it means no sudden shocks to the UK’s export figures. The markets have already priced in the news, with the pound holding steady against the krone.
The bond market, ever the cynic, showed little reaction. Gilts barely moved. This is a vote of confidence in Nordic stability, not a catalyst for change.
Still, in a world of trade wars and tariff tantrums, a reliable ally is worth its weight in gold. The UK’s welcome of Frederiksen is more than diplomatic courtesy. It is a strategic bet on order in a chaotic neighbourhood.
