INGOT Brokers Australia | UK Parliamentary Elections
Markets faced a big shock on the 18th of April 2017, after the surprising decision of UK Prime Minister Theresa May, who called for a general election to be held on the 8th of June 2017. Such a decision wasn’t expected especially after the insistent tone of the Prime Minister claiming that she will not run a general election before the scheduled 2020 poll.
The main reason for this surprising election, is to trace on her intention to give herself more negotiation power for Brexit after the battles she faced against the other counterparties, especially the labor side.
U.K. faced hard times after the terrorist attack during Ariana Grande’s concert in Manchester. The attack gave great support to Theresa May’s stance with regard to security issues like this one. The election campaigns, after being suspended out of respect for the victims, were soon resumed.
The general election is very crucial for all British citizens, as they will decide who is going to represent them in the parliament. The selection process of minister begins after the election results: the leader of the winning party will be asked by the Queen to become the new Prime Minister and he/she will take the responsibility to form a new government and run the country.
The conservatives in the referendum were against the Brexit. However, now, they can’t change that fact that UK exited the EU and that they will have to act accordingly to the current situation. Prime Minister May represents the party, and she called for this general elections in order to strengthen her negotiation power with the EU, as she plans to withdraw the UK from the single market and place a new free trade deal. However, what will happen if she loses the elections or her House of Commons majority cut further? The outcomes can be different based on who will take the lead: whether the anti-Brexit parties, the Liberal Democrats, against the Brexit, or the Scottish National Party (SNP) which is trying to give Scotland a special treatment after the Brexit, and as a result have called for a second independence referendum.
Finally, investors should keep an eye on their portfolios next week, as the markets will face a huge volatility. After the elections results, in case of the conservatives’ loss, we might see a huge increase in the GBP. However, markets are expecting them to be the winning party despite the latest polls predictions which showed that the Labor reduced the gap between them and the conservatives.
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