13 December 2019
By John Husselbee, Co-Fund Manager HC Verbatim Portfolio Growth Funds
Boris Johnson and the Conservative Party will form a new government after winning a majority in the General Election. John Husselbee, our Verbatim Portfolio Growth Co-Fund Manager explains what this means for markets and investors.
An election that was all about Brexit has resulted in a victory for the Conservatives. The nation decided that “Get Brexit Done” was the priority for the next government and, given this mandate, I expect we will see Prime Minister Johnson act swiftly. This removes the near-term uncertainty and should give a much-needed boost to both corporate and consumer confidence. There is also the post-election pledge to spend on health and safety, which will further support a pickup in UK economic activity.
The initial market reaction will likely be a reversal of the moves since the EU Referendum: a stronger pound, a recovery in domestic industries and, considering the proposed fiscal spend, potentially higher Gilt yields. The relief rally may be short lived, however, as the PM and his cabinet start to negotiate a trade agreement, with the possibility of a hard Brexit still among the options.
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