Traders in financial markets are still enjoying a high degree of volatility play after pulling one of the most exciting all-nighters since the UK last went to the polls, which dramatically resulted in a hung Parliament.
Predictions had been for an inconclusive result and as the British public cast their votes, the FTSE was heading into a downward spiral. Media coverage showed an uncertain and often indifferent electorate compounding fears that a clear decision would not be reached, potentially signalling a sharp decline in all things sterling.
Illustrating the markets’ inability to accurately predict the sentiment of the British people, an eventful and surprising chain of events led to David Cameron’s re-election today, with a confident effective majority in Parliament.
SNP Scupper Labour Vote in Scotland
The Conservative vote was buoyed by an almost total victory for the Scottish Nationalist Party (SNP), led by darling of the elections Nicola Sturgeon giving rise to fresh speculation of another push for Scottish independence in the near future.
Exit polls carried out by independent market research companies released their results shortly after 10.00pm GMT, indicating Cameron’s victory and the pound instantly spiked at 2cts to the dollar.
The FTSE100 had been hovering at lowest levels since April, closing at 6,886 on Thursday and after the dramatic overnight events, the UK stock index opened at 7,050 this morning.
Clearly financial markets are pleased with the outcome of the UK elections and investors in sterling assets can breathe a sigh of relief.
Unfortunately, the same can’t be said for defeated Ed Miliband’s Labour Party who commented after winning his own seat in northern England: “This has clearly been a very disappointing and difficult night for the Labour Party. I’m deeply sorry for what has happened.”
Nick Clegg’s Party Leadership in Question
Students all over Britain are going to be feeling vilified by Nick Clegg’s shattering fall from grace, his Liberal Democrats party reduced to 10 seats in Parliament. Famous for reneging on his pledge to students after becoming Deputy Prime Minister in 2010, the issue has firmly bitten his behind.
He said it has been a "cruel and punishing night" for the Liberal Democrats and is due to talk to colleagues today on his future leadership of the party.
In terms of the economic future of Britain, things are looking brighter because of the decisive result in the General Elections. Cameron hinged his manifesto on delivering continued economic growth which has been moderate in recent quarters but at least consistent. With such a resounding majority in government, things are looking much rosier for the UK economy at least.
- Friday 08 May 2015