Investment Clock insights

Sterling soars on election news


Trevor Greetham

18 April 2017

Prime Minister Theresa May has called a general election on 8 June to seek a direct mandate to take the country through the Brexit process. Sterling initially dipped when a surprise statement was announced but has since rallied as the announcement confirmed a general election on 8 June.  Sterling has taken the news of a snap general election positively, as while it means increased political uncertainty in the near term, it probably means less uncertainty in the longer term. 
If Theresa May gets a significantly increased mandate it will strengthen the UK’s position in Brexit negotiations. In any case, while the UK may be distracted for the next few weeks of political uncertainty, there probably isn’t much benefit in the UK engaging with French and German governments on Brexit ahead of their own elections.

Prime Minister Theresa May has called a general election on 8 June to seek a direct mandate to take the country through the Brexit process. Sterling initially dipped when a surprise statement was announced but has since rallied as the announcement confirmed a general election on 8 June. Sterling has taken the news of a snap general election positively, as while it means increased political uncertainty in the near term, it probably means less uncertainty in the longer term. 

If Theresa May gets a significantly increased mandate it will strengthen the UK’s position in Brexit negotiations. In any case, while the UK may be distracted for the next few weeks of political uncertainty, there probably isn’t much benefit in the UK engaging with French and German governments on Brexit ahead of their own elections.

Source: Bloomberg as at 18 April 2017

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