Theresa May has taken markets by surprise with an unscheduled announcement, in which she announced plans to call a snap General Election. This will go to Parliament tomorrow for a vote, but it expected that it will go through as Jeremy Corbyn has welcomed the news.
May explained during her statement at Downing Street that she felt a General Election was “the only way to guarantee certainty and security for years ahead”. She accused the other political parties of “game playing” and suggested that a General Election would help to unite Westminster in the upcoming EU negotiations during the Brexit process.
The news is somewhat unexpected, as Theresa May had previously suggested the next General Election should be in 2020 to avoid adding the unpredictability of an election race onto the current Brexit uncertainty. However, considering a recent opinion poll put Conservatives 19 percentage points ahead of Labour, it is perhaps unsurprising that the party has made a strategic decision to capitalise on Labour’s current weakness.
The uncertainty caused by news of an unexpected announcement initially caused Sterling to slump 0.5% against the Dollar this morning. But when May revealed the news that she wanted a General Election, it quickly recovered these losses. The Pound has since gained more than 1% against both the US Dollar and the Euro, putting it at its highest levels since December 2016. This may be due to expectations that Conservatives could achieve a larger, and therefore more stable, majority at this election, which is likely to strengthen their hand during the Brexit negotiations.
However, it is not unusual for General Elections to put some downward pressure on a domestic currency, so we could have another busy June in front of us.
Whatever happens next, HiFX will be here to help you with a range of options that could help you to make your money go further or provide peace of mind against currency fluctuations. We can help customers manage their money in a volatile currency market and support businesses looking to minimise the risk of foreign exchange fluctuations on their bottom line.
If you’d like to find out more about how we could help you, please contact us.
The details expressed in this transmission and accompanying documents are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. HiFX Europe Limited accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information. HiFX Europe Limited is authorised by the Financial Conduct Authority under the Payment Services Regulations 2009, registration 462444, for the provision of payment services. HiFX Europe Limited is also a registered MSB with HM Revenue & Customs. Registration number: 12131222. HiFX is a limited company registered in England and Wales. Registered number: 3517451. Registered office: Maxis 1, Western Road, Bracknell, Berkshire, RG12 1RT.