Investment Clock insights

General election outcome

Trevor Greetham

8 May 2015

Opinion polls suggested that this would be one of the closest UK general election contests in recent memory but in the event the Conservative Party looks set to govern with something close to an outright majority.

A decisive outcome is a clear positive for business investment and for sterling, which has seen its largest one day jump versus the euro since 2009.

A Conservative victory is likely to be seen as positive for the UK stock market. While a Labour-led administration would probably have offered more support to the economy by way of government spending, the transport sector, utilities and banks would undoubtedly have seen more intervention and tax rates would probably have risen.

Political uncertainty hasn't gone away altogether, however. As a second term Prime Minister, David Cameron will be at the mercy of every fringe of his party without a large group of Lib Dems to hide behind.

Moreover, after a year that has seen a closely fought referendum on Scottish independence and a nail-biting general election campaign, investors now have the vote on UK membership of the European Union to look forward to.

The value of your investment and the income from it is not guaranteed and can fall as well as rise. This article is for professional customers only. The views expressed are the author’s own and do not constitute investment advice.