Finance Monthly December 2019 Edition

Adrian Lowcock, Head of Personal Investing at Willis Owen, evaluates the implications of the upcoming UK election on the markets. THE IMPACT OF THE UK ELECTION ON MARKETS Adrian Lowcock Head of Personal Investing at Willis Owen www.willisowen.co.uk fter weeks of debate and delay, the British parliament has finally agreed there will be a general election on 12th December. The election was widely anticipated and sterling did not move after the announcement. The biggest reaction was concerning that many School Nativity plays will need to be reorganised. Markets are forward-looking as they had already anticipated a general election. Since the bill to hold a general election was passed on the 31st October, the pound has fallen 0.84% against the US Dollar, whilst the FTSE All share has risen 1.39%’. Neither moves are particularly significant and such movements could be down to a number of factors, including changes in the global outlook. This lack of reaction is not uncommon. Investors dislike uncertainty or a lack of information and they adopt a wait-and-see approach. It is impossible to make any sensible investment decisions at this early stage so they don’t take the risk. Markets are likely to become more focused on the result of the election the closer we get to the 12th December. How they behave will depend a lot on whether or not a clear winner is anticipated. However, given that in recent years the polls haven’t been very accurate, combined with the lines being drawn regarding Brexit and parties encouraging tactical voting, it is likely this election’s result will be hard to forecast, no matter what the polls suggest. The typical view is that the Conservatives, with a focus on business and capitalism, are good for the stock markets and Labour, A 22 www.finance-monthly.com FINANCE & BUSINESS - UK ELECTION