Earlier today, the UK prime minister Theresa May surprised the country by announcing a snap general election.
Despite months of refuting the idea of an early general election, May announced the election will take place on 8 June 2017.
Timeline for Businesses
Now, the prime minister needs to secure two-thirds of the House of Commons in order for the election to take place in six weeks.
Here are the reactions from the business community to the news.
Business are concerned about the economy
British Chambers of Commerce director general Adam Marshall said:
“Many business communities will understandably be concerned that attention will inevitably shift from the economy and the intricacies of leaving the EU to a potential election campaign. Firms will want to be reassured that the key challenges facing the economy will be front and centre throughout any election period.”
The CBI’s director-general Carolyn Fairbairn echoed this sentiment.
“With a snap General Election now called, businesses will be looking to each political party set out their plans to support economic stability and prosperity over the next Parliament in a way that is fair and sustainable for communities across the UK. Distraction from the urgent priorities of seeking the best EU deal and improving UK productivity must be kept to a minimum.
“Firms will want to hear commitments from all parties to work in close partnership with business and back a new Industrial Strategy to make the UK economy the most competitive in the world by 2030.”
This could be a sensible idea
Cavendish Asset Management’s fund manager Paul Mumford believes it could be a good thing.
“From a markets point of a view a snap election is welcome news – at least in the longer term once the initial reaction has subsided. Even without the proposed boundary changes, everything points to the Tories being elected with a substantially increased majority – which will give the Government a firm mandate and put it on steadier, more solid ground as it begins the difficult, complex work of negotiating Brexit. This can only reduce uncertainty and the potential for hiccups over the next couple of years, so it’s a sensible move.”
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How are the markets looking?
Online trading services provider, Accendo Markets’ head of research Mike van Dulken sent a memo to clients this morning, saying:
“European equity markets are negative as the UK Prime Minister adds a snap UK general election to simmering global geopolitics. This has made matters worse for the FTSE by sending GBP to multi-week highs versus the USD and EUR, exacerbating the FX hindrance on its big international component and compounding commodity sector weakness.
“The UK’s FTSE100 is underperforming thanks to Oil Majors (oil price lower, GBP strength), Banks (UK sensitive to election) and Miners (strong GBP, metals prices + Oil lower) and Healthcare (US policy delays).
“German DAX being dragged lower by Banks, Industrials and Autos. The FTSE 100 has broken below 7250 to trade 7-week lows. The DAX 30 is trending back towards 2-month rising support at 12000. Dow Jones Futures have bounced back to 20600 but 20650 remains a hurdle. Gold has seen $1285.8 revert to support amid a minor rebound.”