Today is election day, we hope you are ready to vote at your nearest voting station. At 10pm voting will be closed and before the final verdict there will be the exit poll which has been used to predict the outcome since 2005.

The Exit polls is not a statement of who won but a close prediction which has a very impressive track record. In 2019 the exit poll predicted 368 seats for the Conservative party and the actual number of seats was 365.

The Poll is based on a small sample of votes from 130 different polling stations from around the country. People at the stations are handed a replica ballot to fill in to show who they voted for in the real ballot. These replica ballots are counted to see who comes out on top. They also indicate any changes in areas from the last exit poll and past votes are used to predict how each area could vote this time around.

Exit poll predictions

A Win for Labour

Seats Predicted for Labour - 410

Seats Predicted for Conservatives - 131

With only a few days to go until the 2024 UK Election held on Thursday 4^th July we take a look into the polls which aim to keep track of how the public plans to vote on the day.

The BBC polls show that Labour are distinctly ahead of the other parties with predictions placing Conservative 100 seats behind this year.

From 14 years of a Conservative government the UK could be ready for a change this year and the polls are showing it. Voting is open until 10pm at your local voting stations, if you are registered to vote you will have a voting card to tell you where to go, if not you should be able to search for your local voting station.

Each vote from each constituency matter, these are all counted and an MP from each party will sit in the House of Commons to represent a majority vote from a constituency. The party with the most MP representative in the House of Commons will form the next government.

The manifestos have all been published for the public to review their policies and decide which one serves best. Reading the policies rather than focusing on the personality of each candidate to make an informed decision this election can help you change the government and enable change that you want to see.

Policy Overview

Your vote matters for your own financial needs and the UK economy.

If you are looking to buy a house this year, you might be looking at party polices such as the Conservative policy of making the stamp duty threshold of £425,000 permanent stated in their manifesto. In the final days of their campaign, Rishi Sunak repeats his promises and fights off the other parties, refusing to admit that Reform party are a true opposition to Conservative or even the Labour party.

If you are a teacher or have children of school age then it might be important to you to hear that Labour intend to end tax exemptions for private school and will start to charge them VAT. This will increase fees at private schools for their plan to increase funding into state school including mental health professionals in each school. Keir Starmer continues campaigning this week reeling off his argument that if you want change you have to vote for it.

With various promises focusing on improving the NHS from all the parties including Liberal Democrats declaring their pledge to increase funding by £9.4 billion. This is the largest funding promise of any of the parties and some say they are aiming too high for real action to be done here.

The political parties are aiming to appease as many people as possible this year with the cost of living increase being a large factor in voters decisions. The Green Party also promise to be focused on bringing down costs, they pledge to do this through increase national insurance for the top earners where Labour have stated they will not be raising national insurance.

The party manifestos reveal little about how it will all be done, more funding into the NHS, less government waste, more defence funding and tax cuts are all mentioned across the manifestos but how can all this be true?

Questions rise about how their promises will be executed and what about our personal finances?

With the UK’s national debt levels higher than ever the interest of paying this back is just rising and keeping the borrowing levels down means getting the income from the UK economy and taxes instead.

Public services like the NHS are deeply suffering which is clear to everyone as the NHS has been a big part of all the manifestos. The waiting lists for appointment and treatments, the strikes from the staff and the lack of space are all reported problems that the parties promise to work on from July.

The conservatives have also promised an increase in funding for defence due to current world affairs and a promise to prepare the UK better.

With all of this spending how are they proposing tax cuts alongside these?

The Institute for Fiscal Studies have stated their prediction for tax increases in the next 5 years as these huge decisions make for incoming changes to the country. They critique the parties for not addressing these financial issues which will affect every household.

Are the parties staying silent until the election or just burying their head in the sand?

They will have to raise taxes to fund public services or let public services suffer further. Or will they borrow more money and see debt rise further?

The election day has been set for July 4^th and the manifestos are yet to be published. For each party they have set out a list of polices they would focus on if they win the election.

Labour

Labour lay out some of their top priorities they will tackle.

• Improving waiting times for treatment and care in the NHS. Labour plan for create 2m more appointments and recruit more staff.
• Improving state education by ending the tax loopholes which help private schools avoid tax. This will create better funding for state schools including setting up free breakfast clubs and more mental health support.
• Clamping down on the water companies regulations to reduce the sewage leaks, price increases and improve the workings of these firms.
• Clearing the backlog in the asylum system, hiring more staff and clamping down on illegal smuggling.
• More support for victims or sexual violence, setting in place rape units in every police force, more specialists in each unit and fast tracking courts and legal advice for victims.
• Creating economic stability through a fiscal lock and making the minimum wage a living wage.

Conservatives

Top 5 priorities the Conservative party have laid out.

• Halve inflation, to ease the cost of living.
• Grow the economy, creating better paid jobs as well as more opportunity across the country.
• Reduce debts and secure public services.
• Cut waiting times in the NHS for treatment and care.
• Stop the boats, reduce illegal immigration on dangerous small boats. The Rwanda plan is part of this priority to send asylum seekers to Rwanda, deemed a safe country, by the government.

Liberal Democrats

Beliefs the Lib Dems prioritise

• Emphasising the importance of equality, fair education, legal support and welfare for everyone.
• Rebuilding international trust and co-operation to improve the UK relations. This will improve UK economy as well.
• Promoting environmentalism and sustainable living.
• A strong economy through investing in infrastructure, clamping down on tax avoidance to ensure fair taxes.
• Policies for healthcare will include reforming dentistry to reduce the expense, open healthcare for everyone and improving appointment wait times, investing in mental healthcare so it is treated equally to physical health.

Reform

Some of the policies set out by Reform

• Cut government spending to reduce waste within the government, this included reducing foreign aid spending by 50%.
• Reform social housing so that Foreign nationals go to the back of the queue, Reform party believes those who were born overseas should not be given social housing over others.
• Ban all ULEZ and Low traffic neighbourhoods, scrap bans on selling petrol and diesel cars as well as legal requirement for manufacturers to sell electric cars.

Green

Some of the Core values of the Green party.

• Priority on free and equal education for everyone with emphasis on continual education.
• They promote education and action for the climate emergency, they believe the earth is imperative to our survival so should be one of the top priorities to improve.
• Reducing the demand for energy and raw materials and favouring low energy, non-polluting processes based on renewable resources.
• Providing worker protection under the law in all sectors and areas.
• Tackling crime and justice by understanding social causes as well as restorative justice to reduce repeat offenders.

So, how will the 2019 general election affect business? We take a look at the predictions and what they could mean for commerce.

It’s an election that prime minister Boris Johnson had been chasing for weeks in an attempt to break the Brexit deadlock, but the vote has come sooner than expected for business leaders and the public.

Pundits are calling it a once-in-a-lifetime ‘Brexit election’ and, given those stakes, the impact on British business could be seismic.

Navigating major change from inside the C-suite is rarely a smooth ride. It means creating a backup plan for your backup plan, then running the numbers for each.

Fortunately, corporate speakers and expert journalists were on-hand to offer their insight just as the possibility of an election descended on the City of London at a night aptly called ‘Preparing for Unprecedented Change’.

At the event, former BBC business correspondent Declan Curry stressed that Brexit is just one of the big changes Britain could face in the fallout from the election.

The business and economics speaker said executive teams are also busy making plans for the possibility of a Corbyn-led Labour government.

“Businesses are hearing the commentary that we’ve had since 2017 – that polls indicate that he has absolutely no chance whatsoever of being the next prime minister,” he told the crowd of corporate guests in Barbican, central London.

“But then they remember the polls running up to the Brexit vote were wrong, the polls running up to the 2017 election were wrong, and in 2015 they weren’t exactly models of prediction either.

“And business leaders like to be prepared,” he adds. “So in most major companies there will be someone somewhere – an executive in an office with the door closed – drawing up the plans for ‘what if’.

“What if John McDonnell is the chancellor, what if the idea of having trade union representatives forcibly on boards is enacted? What if there are bans and restrictions on bonuses?”

As we speak, many businesses are preparing for this possibility just as they are preparing for Brexit. Declan added: “This is being mapped out as a theoretical enterprise.”

The event was organised by international speaker bureau Speakers Corner, whose 7500-strong portfolio of orators and experts have already been called on many times to help businesses navigate the uncertainty of Brexit.

In fact, Declan Curry revealed he himself takes professional guidance on the levels of Brexit fatigue in a given audience before taking to the stage.

He was also keen to point out change can bring opportunities as well as risk. Near the Irish border in Donegal, people are “excited for the return of the ancient art of smuggling,” he joked.

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“Brexit will throw up opportunities, too,” said Declan, pointing to law firms currently profiting from all the uncertainty. The former On the Money radio show host said economies are suffering and pondered the idea that another financial crash could be looming – something that could magnify the risk to British business.

This speculation comes as both major parties enter a public spending bidding war that the Institute of Fiscal Studies has said may be undeliverable.

General elections often make markets unstable, but the combined uncertainty around Brexit and the UK’s economic direction is heightening the impact on shares – especially for companies like BT, which could even be partly nationalised under Labour plans.

Still, some business leaders see the vote as an imperfect path to preventing the damage of a hard Brexit. Sonia Sodha, chief leader writer at the Observer, also spoke at the Knowledge Guild event – and she is sympathetic to this view.

“You can see a path to a Labour-led coalition government with Lib Dem and SNP support if Boris Johnson loses a significant number of seats,” she said, but feels an election is not the best way to deal with the Brexit question.

Business owners and C-suite executives have expressed concerns about the risks of a chaotic Brexit since 2016 – and despite continued delays, the risk of no deal remains. The implications could include increased taxes on imports and exports, supply chain delays and staffing supply problems.

“We are going to be talking about Brexit for years to come, whichever outcome,” Sonia told the crowd of central London executives.

For executives concerned with risk management, the turbulence runs in many directions. The only certainty is the election result will spark significant change – whatever the result.

The new Government has to prioritise economic renewal, encourage investment and provide more support to businesses looking to grow according to Michael Izza, ICAEW’s chief executive. In anticipation of the Queen’s Speech later this week, he is urging ministers to take steps now to head off a looming threat to economic growth from weakening business investment, rising inflation and slower wage growth as revealed in ICAEW’s latest forecast.

“We cannot underestimate the impact that the current outlook for the UK has on business confidence,” said Michael Izza. “The vote for Brexit, the outcome of the General Election and looking ahead, the negotiations on leaving the EU all help build uncertainty and create a hiatus in making long term changes to our tax and regulatory systems.

“In the current climate, businesses tend to see the potential risks rather than the rewards of investing. I would like to see the new Government put business and the economy at the top of its agenda, doing more to create a climate of optimism and certainty which will help build confidence. It also needs to send a clear signal to the rest of the world that Britain continues to be an good place to do business, to invest and to trade. Not to do so could put at risk the economic progress we have made over the last two parliaments.”

ICAEW has also published its Economic Forecast for Q2 2017 which has revealed:

• Real income losses for households. Weaker growth in demand for workers, along with upward pressure on non-wage labour costs faced by firms, suggest that wage growth will remain around 2% in 2017. With the Bank of England expecting inflation to remain close to 3% for the year, this will lead to a squeeze in household incomes through the second half of 2017.
• Weaker business investment in 2017, but potential for faster rebound. Investment recovered a little in Q1 2017, but ICAEW continues to forecast a modest fall for the year. However, firms’ financial positions and profit margins remain good, and borrowing costs will remain low for quite some time. But given the uncertain domestic political outlook and difficult Brexit negotiations to come it seems likely firms will continue to exercise restraint in their capital spending.
• Labour market to remain tight. Recent labour market data suggests the degree of spare capacity remains historically low, while BCM evidence shows firms expect to continue to create jobs in the year ahead. At just 0.7% for the year, the rate of private sector employment growth will be the slowest since 2012. Given the continued growth in working-age population, this rate of job creation will be just enough to stabilise the unemployment rate close to the current level.
• Q1 slowdown could prove temporary. GDP growth slowed sharply from Q4 2016 to Q1 2017, with the 0.2% reported in the first three months of this year - the slowest increase since 2014. We expect GDP growth to rebound a little in the remainder of 2017, with exports playing a greater role in driving growth than in previous years. We have nudged up our forecast for GDP growth in 2017, from 1.6% in our last report to 1.7%.
• Long-term fiscal risks still not being tackled. The last fiscal year delivered the smallest budget deficit in cash and GDP terms for almost ten years. But early evidence for 2017-18 suggests that the slowing economy is hurting the UK’s fiscal position.  The election campaign has demonstrated that no consensus exists on how to tackle longer-term risks to the public finances.

Michael Izza adds: “The voice of business needs more prominence within Government’s plans to rejuvenate the economy. The political parties, who largely ignored business in their manifestos, must now engage with the business community if UK companies are to thrive in a post-Brexit landscape.”

(Source: ICAEW)

In this video, Mark Burgess, Chief Investment Officer, EMEA, talks about how the markets view the June 8th 2017, election result and its potential impact on the UK economy. He also discusses what the election outcome signals for the forthcoming Brexit negotiations.

Authored by Markus Kuger, Senior Economist at Dun & Bradstreet.

On Monday 19^th June, the UK is scheduled to enter negotiations for its exit from the EU, in discussions that will fundamentally shape the future of the country and its economy. Just two months ago Prime Minister Theresa May surprised the nation by calling a shock general election, seemingly with the aim of strengthening her position in the Brexit negotiations and bolstering her claim to represent a consensus in the UK. However, the election did not unfold as expected.

Despite early polls suggesting a 20 percentage point lead for the Conservatives, the Tories lost 13 seats and thus their overall majority. Now, just days before talks with the EU begin, the Prime Minister is involved in domestic negotiations with the Democratic Unionist Party (DUP) to form a government. So, what will the ‘Hung Parliament’ outcome mean for Brexit negotiations – and how can businesses respond?

On the home front

Short-term political uncertainty in the UK has increased sharply. The Conservative Party must now enter an alliance with another party in order to pass the Queen’s Speech and form a new government. Overall, this process will be time-consuming, leaving businesses without a clear outlook in the coming days and possibly even weeks.

In the longer term, even with the support of the DUP, the Conservatives’ majority will be extremely slim – which will be problematic, given the wide spectrum of views within the party on a number of issues, including Brexit. Against this backdrop, the government is likely to need to tread a conciliatory line both within and outside its own party: all of which will fundamentally impact the Brexit negotiations. Taking all factors into account, Dun & Bradstreet has downgraded the UK’s Political Environment Outlook from 'deteriorating' to 'deteriorating rapidly’, although this indicator is likely to be upgraded again once a new government is formed.

At the negotiating table

The dynamic of the Brexit negotiations has changed fundamentally. After Article 50 was invoked on 29 March and snap elections were called in April, initial talks between the EU and the UK were scheduled for 19/20 June. However, this round of talks is unlikely to deliver any noteworthy results, as the yet-to-be-formed British government will not have had enough time to prepare its negotiating position.

The election result suggests that the UK lacks an overwhelming consensus on the sort of deal that should be brokered. Theresa May’s personal position has also shifted, and rumours already suggest that she could be asked to step down by her own party at some point in the coming months as a result of the disappointing election outcome. The UK government may need to placate a broader range of opinions in parliament – including those of other parties – to pass any legislation. The extra time this will take will make negotiations with the EU even more complicated: Article 50 sets a strict 24-month deadline within which talks must be completed, of which two months have already passed due to the election campaign in the UK.

We predict that in the long run, the election result could make a ‘hard’ Brexit – which our analysis suggests would be harmful for the British economy – extremely hard to implement. It’s now more likely that the UK could remain in a customs union with the EU, reducing Brexit’s impact on businesses. The election outcome has even opened up the very small chance of the UK remaining in the EU, although businesses should continue to assume that the UK’s exit from the EU will still take place in March 2019. With so many factors in play at home and internationally, it is currently difficult to predict how the negotiations will unfold.

From the business perspective

All of this makes for a complex environment for businesses. Our analysis indicates that uncertainty will remain high in the next 18 months, regardless of what happens in the wake of the election, and we are maintaining our risk rating for the UK at DB2d, with a ‘deteriorating’ outlook. Given the backdrop of an already slowing economy (the UK posted the lowest real GDP growth of all 28 EU economies in Q1 2017), it is not surprising that businesses are beginning to express a lack of confidence, as seen in a recently published survey for the Institute of Directors.

Businesses should continue to monitor the progress of negotiations, and use the latest data and analytics to assess risk and identify potential opportunities. Once a government is firmly in place and Brexit negotiations progress, organisations may get a clearer picture of the likely basis for future business relations between the UK and the rest of the world. Until then, a careful and measured approach to managing relationships with suppliers, customers, prospects and partners will be essential.

Navigating uncertain times

The general election result surprised most commentators, and more importantly it creates the prospect of greater uncertainty in the medium term – both domestically and for the Brexit negotiations, which will be one of the most significant factors in the future development of the UK economy.

However, it’s vital to remember that the UK remains a stable economy, with long-term economic potential that exceeds that of most other European economies. For now, businesses should continue to follow developments closely as the impact on the Brexit settlement – and the political landscape of the UK – becomes clearer.

For all the stability that this latest General Election was due to bring, the Great British Public awoke on Friday morning with more questions than answers. With a weakened Government and a reinvigorated opposition, what does the world now look like for the fintech industry? Here, Kerim Derhalli, Founder and CEO of fintech app invstr, discusses the results’ impact on the fintech sector.

Traditionally, politics and technology has had an uneasy relationship. On the one hand, tech innovators strive to upset the status quo and find new ways of doing things; on the other, governments tend to be comfortable once they have exerted control over the unknowns of new technology.

The great challenges

In the aftermath of two horrific terrorist attacks in London and Manchester, Theresa May moved quickly to criticise technology companies for providing “safe spaces” for extremist ideology, reinforcing the Conservative pledge for greater regulation of the internet.

Labour, conversely, support greater rights on the internet specifically, backing a ‘Digital Bill of Rights’ within their digital manifesto – released in August last year.

How will these two opposing ideologies play out in a fintech world brimming with optimism and entrepreneurship? There are pros and cons, and it may be that a hung parliament works in the favour of the tech glitterati.

The criticism of the Tories has been that they protect the big boys. Low corporate tax and a reduction in business red-tape will have the big banks rubbing their hands, but there’s also plenty for startups, disruptors and SMEs to be excited about.

But the Conservative’s manifesto declaration that “for the sake of our economy and our society, we need to harness the power of fast-changing technology” should be treated with caution.

Harness or heel?

The phraseology is fascinating. What does ‘harness’ really mean? If it means a managed level of regulation, which keeps consumers safe from the more sinister aspects of technology, while maintaining the capacity for innovators to try new things, then fintech entrepreneurs will be cheering.

If the real result is Big Brother laying down the law and attempting to bring the disruptors to heel, then the outlook isn’t so positive and, in reality, this approach is liable to backfire. As we’ve seen with Trump, the social revolution and today’s unprecedented access to shared information, the masses will soon make themselves known if they feel the palm of oppression settling on any of their concerns.

In January, Mrs May and Co. announced their modern industrial strategy, which promises investment and support for science, technology and innovation. On the surface, this is great news for the fintech set. University R&D funds, similar to that of the United States, could really accelerate advancement for innovative startups.

In the red corner

And what of their prime competitors? We’re now a decade on from the financial crisis, and Labour has said that it is time to reawaken the finance industry.

Their headline campaign announcement was a National Investment Fund that will bring in a £250 billion boost in lending for small business across the country. The manifesto cited private banks, small businesses and promised “patient, long-term finance to R&D intensive investments”. With fintech firms by-and-large falling into this category, this mantra could prove to be a firm positive for the sector, if the opposition flexes its muscles over the next term, as it can now do.

Back to the language of the document; Labour’s manifesto called out ‘big City of London firms’ as those which don’t support growth in communities. With tens of thousands of fintech roles sitting in the Square Mile currently, there may have been a few CEOs shifting uncomfortably in their seats.

Just last week, new figures from Europe’s prestigious Fintech50 list, which picks out the hottest fintech organisations, shows London providing half of the overall list.

Labour also pledged to appoint a Digital Ambassador to liaise with technology companies to “promote Britain as an attractive place for investment and provide support for start-ups to scale up to become world-class digital businesses”. Can one person change the face of tech investment in the UK? Fintech disruptors would be pleased to have an advocate in Whitehall, but similarly, the country is already showing that it is a leader in the world of tech and long may that continue.

The continuing turmoil is Westminster isn’t good for business on the whole. According to the Institute of Directors, confidence has plummeted since Thursday’s result – leaders want, believe it or not, ‘strong and stable’ leadership.

But the balance which the hung parliament gives us – a weakening of heavy-handed regulation policies on one side, and a firm dose of realism on the other as to what cash is available – may well work in the fintech industry’s favour.

Fintech is up to the challenge and will thrive. The arm-wrestle between governance and technology, politics and finance, regulation and disruption, between the established and the new, will continue. We’re opportunistic creatures, and we’ll continue to adapt and make the most of the breaks whatever government is there is provide them.

The first poll of business leaders since Thursday’s General Election reveals a dramatic drop in business confidence and huge concern over political uncertainty, and its impact on the UK economy. Company directors see no clear way to quickly resolve the political situation, feeling that a further election this year would have a negative impact on the UK economy.

The nearly 700 members of the Institute of Directors who took the survey are looking for any political certainty that can be found and are keen to see quick agreement with the European Union on transitional arrangements surrounding the UK’s withdrawal, and clarity on the status of EU workers in the United Kingdom.

The overall priority for the new Government, according to IoD members who have taken the survey since noon on Friday, must be reaching a new trade deal with the European Union. On the domestic front, work to deliver a higher skilled workforce and better quality infrastructure is considered vitally important.

A summary of the key findings and the full results of the survey can be found below.

Stephen Martin, Director General of the Institute of Directors, said: “It is hard to overstate what a dramatic impact the current political uncertainty is having on business leaders, and the consequences could – if not addressed immediately – be disastrous for the UK economy. The needs of business and discussion of the economy were largely absent from the campaign, but this crash in confidence shows how urgently that must change in the new Government.

“It was disheartening that the only reference the Prime Minister made to prosperity in her Downing Street statement was to emphasise the need to share it, rather than create it in the first place. With global headwinds and political uncertainty at the front of business leaders’ minds, it would be wise for this administration to re-emphasise its commitment to a pro-business environment here at home.

“Business leaders will be acutely aware that Parliaments without majorities are more prone to politicking and point-scoring than most. If we do indeed see a minority Government, both sides of the aisle must swallow their pride and work on a cross-party basis on the most important issues. The last thing business leaders need is a Parliament in paralysis, and the consequences for British businesses and for the UK as an investment destination would be severe.

“Saying this, there is also little appetite for a further election this year, and indeed business leaders are keener to see the new Government get to work in Brussels and on the domestic front. Ensuring negotiations start well, and delivering higher quality skills and infrastructure across the country, must be the priority.”

Markus Kuger, Senior Economist at Dun & Bradstreet said: “After the surprising election result, political and economic uncertainty in the UK has risen considerably. The election outcome looks set to further complicate the process of negotiating the UK’s departure from the EU, as the government only has a narrow majority in parliament – and even this looks vulnerable in the context of Conservative MPs’ widely differing views on post-Brexit UK-EU relations. Given the backdrop of an already slowing economy (the UK posted the lowest real GDP growth of all 28 EU economies in Q1 2017), it is not surprising that businesses are beginning to express a lack of confidence. We believe it’s highly unlikely that the first round of Brexit talks between the British government and the EU (scheduled for 19/20 June) will deliver more clarity or significant results. This means that companies will have to wait even longer to assess the impact of these negotiations on their business.

“Our analysis indicates that uncertainty will remain high in the next 18 months, regardless of what happens in the wake of the election, and we are maintaining our risk rating of DB2d and our ‘deteriorating’ risk outlook for the UK economy. We predict that, in the long run, the election result could make a ‘hard’ Brexit - which we believe would be harmful for the British economy - impossible. The best advice for businesses is to monitor the progress of negotiations, and use the latest data and analytics to assess risk and identify potential opportunities. Once a government is firmly in place and negotiations progress, organisations may have a clearer picture of the business partnerships between the UK and the rest of the world. Until then, a careful and measured approach to managing relationships with suppliers, customers, prospects and partners will be key to navigating through these uncertain times.”

Following the shock Genereal election result from this morning, Finance Monthly reached out to Mark Dampier, Head of Investment Research at Hargreaves Lansdown, who discusses the impact that the election result will have on the UK investment market.

The current siuation is very different to the Brexit vote of last year. While the result is a surprise and may lead to another election later this year – market reaction has generally been subdued so far because the Tory government will remain in power, but a hard Brexit now looks less likely.

There will be no dramatic changes in domestic policy immediately, as there would have been under Labour, had they got in. Therefore, I see no need to make any rash investment decisions, given the range of possible outcomes over the next few weeks. Investors should sit tight or even buy, if the opportunity arises.

Overseas investment is unaltered by the election apart from changes to sterling, which should act positively as we have seen over the last 12 months. That said - remember a softer Brexit could see sterling recover.

We have always advocated a level-headed, long-term approach to investing, and I would urge investors to resist the temptation to make short-term, knee-jerk reactions. We could see some volatility over the coming days as more details emerge about the new government.

Once a government is in place, I expect the dust to settle fairly quickly. There will be a dawning realisation that everything has changed and nothing has changed. For the vast majority of UK companies, it will be a case of “business as usual” on Monday. Many companies have been around for decades and seen governments of both colours come and go.

In our view, investors should continue to pursue their long-term strategy. The international nature of the UK market means that in reality, the election result matters little for many UK-listed companies.

Chris Saint, Currency Analyst added: “Uncertainty over the formation of the next government means sterling exchange rates will inevitably remain volatile in the days ahead, as markets try to fathom how this could impact upcoming Brexit negotiations. However, the pound’s initial declines may have been tempered by hopes that any eventual deal which requires cross-party support might actually imply a ‘softer Brexit’ approach which could see the UK keep trade access to the EU single market for trade.”

On 18^th April 2017, the UK Prime Minister Theresa May announced today’s snap general election, 8^th June 2017. Three years earlier than scheduled, May’s official reason was to strengthen her hand in the Brexit negotiations, which she feared the other parties would try and frustrate.

With 650 parliamentary constituencies, the general public will elect one Member of Parliament (MP) to the House of Commons for each. The Conservatives currently hold 330 seats, with 326 seats needed for a majority.

If the Conservatives add to their seats at this week’s election we could quickly see an escalation to the sterling £; rallying to new year highs of up to $1.32/33. However, as we draw ever closer to Election Day and with it the almost daily release of new polls and surveys showing support for Labour, we are experiencing a few wobbles. Recently, Labour has closed the gap from 20% behind the Tories to just 7% over the campaign, according to the average of the last 8 polls. Significantly, 7% holds a lot of weight – it’s the lead the Conservatives had going into the last election. Anything less than this figure and they could see their majority reduce, not increase.

Markets were spooked by last year’s wrong predictions and false surveys over ‘BREXIT’ and

‘TRUMPIT’. As a consequence, I think any poll or survey needs to be taken with a pinch of salt! Indeed, the latest round of polls over the weekend were also inconclusive. The weekend polls put the Conservative lead at anything between 1% (Survation) and 12% (ICM) - even the pollsters can’t agree. - says Steve Long, Chief Risk Officer at Avem Capital.

A big factor will be the uncertainty of the young vote. Whilst young people are more likely to vote Corbyn, they are also less likely to get out and vote.

The sterling currency pair will be nervous up to Election Day as liquidity and volume dries up and HFT and Algos disappear for a few days.

One question we ask is why make a market to be 5% offside immediately?

Another factor to take into consideration during Election Day will be the timing of the result. The result will likely be announced around 4am, when most of the UK is asleep. Early indications however, may come as early as 10pm on Thursday, when the exit polls are announced. In recent times, these have been generally more reliable than the pre-election polls, with confirmation of their accuracy proving evident as the first results are announced from about 1am onwards.

Possible result outcomes could produce the following permutations:

• A Labour win: £ drops 5/10%
• A Conservative majority: £ increases +3%
• A hung parliament would probably see a 3/5% spike in a very short time…say 30

seconds, before dropping significantly!

Recently we have seen the FTSE benefit from being cheap. This has given exports a helping hand, however a stronger £ would hurt the FTSE especially the FTSE250 which has just topped 20000.

A Labour victory or hung parliament would immediately turn the markets negative. We would likely see scenes similar to the day Brexit was announced, i.e. a 10% drop in seconds. However, before the excitement of Election Day, we first have the ECB and Draghi to contend with. He has already stated that he will say something special!

Taking heed from the Cub Scouts motto, “Always Be Prepared” …you can be assured that at Avem Capital, we are, always! - adds Long.

(Source: Avem Capital)