020 7898 0500Sterling was licking its wounds after the results from the general election left the UK in no man’s land. The political landscape has, once again, changed. When May called the general election on 18 April, it was suggested that it would be a major landslide victory, thereby giving her a mandate for Brexit. However, the nation has spoken and what it says seems to undermine what May felt to be true: that she could increase her majority and get on with negotiating on her terms. The big question is what happens next?
If the Conservatives are able to reach a deal with the Democratic Unionist Party, the government would secure a working majority of 14. This would be larger than the 12-seat majority they had before, but a far cry from what they envisaged. However, while mentioning that she will look to work with the DUP, May failed to acknowledge that an official coalition will be formed. Brexit negotiations are scheduled to start on the 19 June, the same day as the state opening of parliament.
The week ahead is bound to focus on the new political bias we now have, as well as the potential repercussions. In addition, there is a ton of key economic data to keep the markets busy. On Tuesday, the UK’s headline inflation figures are released followed by the unemployment data on Wednesday. Investors will also be keen to see the Bank of England’s thoughts when they meet on Thursday.
