The general election result has been a surprise. Support for Jeremy Corbyn and the Labour Party was underestimated and the markets also got it wrong, predicting instead a comfortable Conservative victory.
We are all becoming increasingly familiar with this type of political drama – Brexit and the election of Donald Trump being two notable surprises of the past 12 months.
We believe markets will readjust and any significant trauma will be short lived. We are however not complacent and continue to monitor market reaction.
Bonds and Equities Equity markets may be nervous in light of the result. Large multinationals are affected by movements in sterling and could move a little more, reflecting swings in the pound and global sentiment rather than domestic political issues. We don’t think that bond yields will move much from their current levels, unless significant concessions are made to Tory pledges, something that is looking unlikely at this stage.
While gridlock in Westminster is now more likely, we don’t think that this election result will dramatically change the outlook for the UK investment landscape.
If you would like to discuss the impact of the UK Election on your investments, please contact us.