A week is a long time in politics, as Harold Wilson famously said. So one can only imagine what he would have made of the past year in which the UK has voted for Brexit, changed Prime Minister, triggered Article 50 and held a general election. And while the political saga has been going on, the effects on the UK economy are only just starting to appear.
Sterling-based investors face the additional uncertainty caused by the Brexit vote alongside the usual vagaries in markets. When in doubt, it can be tempting to extrapolate recent performance, however today that could prove unwise.
In a surprising result, the general election has ended in a hung parliament. At the time of writing, the Conservative party has won approximately 318 seats. Labour is at 261, the SNP 35, the Liberal Democrats 12 and the DUP 10. UKIP did not win any seats.
When Theresa May called the snap election in mid-April it was hers to lose, with the Conservatives leading Labour in the polls by around 20 percentage points – the highest since the early 1980s – which could have yielded a majority of circa 100 seats.
In the event, the gamble has failed to pay off, and the governance of the country hangs in the balance.
Ageing populations are reducing global trend growth. However an army of grandmas is boosting the UK labour force because of changes to retirement ages. This means UK trend growth should hold up relatively better than the US. However, an offsetting end to immigration would see the UK labour force freeze.
In an unscheduled announcement, Theresa May has declared her intention to call a general election on 8 June. This snap election will be almost three years ahead of schedule. Below we address the five most pertinent questions likely to be on investors’ minds.