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4 May 2015
UK election uncertainty could impact investors – BBH
FXStreet (Barcelona) - The Brown Brothers Harriman Team comments on the UK elections, and note that if the probability of a hung parliament stands true, impact on investors might be significant.
Key Quotes
“The UK election is imponderable and overshadows high frequency readings of the economy. The week ahead features the PMI reports for April. A profound irony lies in Scotland. Although its bid for independence was easily rejected (and the inaccuracy of the pools, which had it close should be a warning about the UK election), the Scottish Nationalist party may have greater influence over policies than if referendum had won.”
“With the Conservatives and Labour running close, and neither with a majority, a coalition will likely be necessary.”
“Given the destruction of the Lib-Dem base (seemingly losing its identity as the junior partner in the coalition), its support alone may not be sufficient to give either party a majority.”
“UKIP and the Greens are also not likely to win more than a handful of seats. The Scottish Nationalists will have a blocking minority.”
“The risk that the election does not produce a government should also not be entirely dismissed. While it may be a low probability scenario, the impact could be significant for investors.”
Key Quotes
“The UK election is imponderable and overshadows high frequency readings of the economy. The week ahead features the PMI reports for April. A profound irony lies in Scotland. Although its bid for independence was easily rejected (and the inaccuracy of the pools, which had it close should be a warning about the UK election), the Scottish Nationalist party may have greater influence over policies than if referendum had won.”
“With the Conservatives and Labour running close, and neither with a majority, a coalition will likely be necessary.”
“Given the destruction of the Lib-Dem base (seemingly losing its identity as the junior partner in the coalition), its support alone may not be sufficient to give either party a majority.”
“UKIP and the Greens are also not likely to win more than a handful of seats. The Scottish Nationalists will have a blocking minority.”
“The risk that the election does not produce a government should also not be entirely dismissed. While it may be a low probability scenario, the impact could be significant for investors.”