Category Archives: UK General Election

GBP to suffer after political home goal

GBP To Suffer After Political Home Goal

The aftermath of the UIK’s controversial 2017 General Election seemed to come into focus towards the end of last week after a period of uncertainty. This came as yet another blow to the new government of Theresa May already left reeling by losing its majority in the British Parliament and having to form a minority administration in combination with the Democratic Unionist Party of Northern Ireland. Initially, following the immediate dismay in the wake of the comparatively poor performance of the sitting government, Sterling seemed to rally as hopes grew for a Soft Brexit. This was paradoxically a result of the involvement of the DUP in the new administration. The paradox here is that, until the rise of UKIP, the DUP were seen as the most Euro-Sceptic of all the larger British political parties. However it is always important to note that the DUP is a party of Northern Ireland, and Northern Ireland relies on its close trading links with the Republic of Ireland. The DUP is therefore very definitely in favour of the frictionless border with the Republic and no observers could see how a Hard Brexit could be negotiated or realised if such an open border existed between part of the UK and part of the EU. The prospective reality of this eased fears somewhat as the start of the Brexit negotiations loomed. Sterling also recovered against the dollar in the wake of softer than expected US economic announcements and also because of the USA government’s own political troubles.

However, these tentative signs that all was not as grim as it looked for the pound in the immediate future were soon offset by cold, hard realities revealed by eh EU’s demeanour and announcements, and also by hawkish behaviour from Euro currencies. The European Union remained firm in its commitment to a policy of refusing to consider future trading negotiations until the finality of Britain’s exit was hammered out at the conference table, these details including the small matter of financial obligations on the UK’s part amounting to €100 billion. Perhaps not surprisingly the chart for the Euro and Sterling indicated a risk towards the downside with technical indicators firmly in the negative.

All in all Theresa May’s decision to call a snap general election in 2017 seems set fair to count as one of the most decisive home goals ever scored by a party in government. The desire was too firm up the Conservative government’s position and grant it a mandate to negotiate Brexit strongly with a country united behind a strong administration. The end result has left a weak and shocked minority government in office, beholden for its ultimate support to a small party that, in one vital area of policy, is committed to steps that would sabotage the Brexit in the eyes of many of its supporters. Thus a weakened government faces negotiations vital the country’s economic future. It is not surprising that Sterling looks set to perform negatively in most major pairs.

Spread betting, CFD trading and Forex are leveraged. This means they can result in losses exceeding your original deposit. Ensure you understand the risks, seek independent financial advice if necessary. The value of shares and the income from them may go down as well as up. Nothing on this website constitutes a solicitation or recommendation to enter into any security or investment.

 

 

Scottish Referendum

Pound Takes a Hit Upon Scottish Referendum Murmurings

Greg Swift, A spokesperson for UK PM Theresa May, has reported that May remains against a second Scottish independence referendum. While speaking to reporters in London he stated that should the question be asked as to whether there would be another referendum, then the answer would clearly be a defiant “No.” Also, he pointed out that the Scottish people made their decision blatantly clear in 2014, to remain in the UK. The results were definitive, legal and fair, as such, it is no surprise to see that May wishes to stick to her guns over the matter. Swift was responding after a noticeable reduction in the pound, which was brought on by reports that the Scottish government was making preparations to have a second referendum vote.

 

A reduction of about 0.6% against the dollar was the level to which the pound dipped after May’s team was preparing for controversial Nicola Sturgeon, to use the Brexit controversy as a reason to call for yet another vote. During September 2014, Scotland voted 55% – 45% to stay in the UK. However, a poll carried out by the Glasgow Herald found that the split in favour of remaining within the union had shrunk down to just two percentage points. Bookmaker William Hill said that there’s a greater chance of Scotland’s nationalists succeeding should there be another referendum, with 7/4 odds for a “Yes” vote versus 2/5 odds for a ”No” vote.

 

The Scottish government refrained from commenting on the Times report.  However, since the historical Brexit vote on June 23rd, Sturgeon, the SNP leader, has continuously said that a second independence referendum was “likely to happen” after Scottish nationals opted to remain in the EU. She even stated that she felt that the UK government was running out of time with regards to Scotland’s wish to remain in the single market.

 

As with other ministers, May has made it known that they do not wish to chase after single-market membership within their talks of an after-Brexit EU deal. According to government officials involved in Brexit planning, the PM intends to prompt Britain’s withdrawal from the EU, doing so close to the time that a summit takes place in Brussels. The Scottish National Party holds its annual Aberdeen-based spring conference just 7 days later, with it sure to be an event with strong independence referendum ramifications. Economic editors such BBC’s Robert Peston is of the opinion that the UK’s increased cost of finance and the resultant harm to economic growth will continue for as long as the uncertainty about the referendum persists.

 

The reality is that, with the pound wavering, another Scottish independence vote could do further damage. In fact, the level of damage that it could do may actually prove to be rather telling given time. That being said, while it’s something that the SNP is clearly pushing for, the reality is that they are only likely to receive what they’re after under specific terms, with Theresa May certainly set to call the tune.

 

Spreadbetting, CFD trading and Forex are leveraged. This means they can result in losses exceeding your original deposit. Ensure you understand the risks, seek independent financial advice if necessary. The value of shares and the income from them may go down as well as up. Nothing on this website constitutes a solicitation or recommendation to enter into any security or investment.

 

Alexander Bowring is a London based writer and a Southampton Solent University Screenwriting graduate. He has worked alongside TV personality and Telegraph feature writer Alison Cork, whilst also having produced content for ITV, This Morning, Canvas8, Who’s Jack, Alison at Home, and Bonallack & Bishop Solicitors. Alexander also has a keen interest in investments.