April 19, 2017

UK Political Parties Gear Up For A Snap Election

UK Political Parties Gear Up For A Snap Election

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Editor’s Remarks:
UK Prime Minister Theresa May’s decision to call an early general election came as a surprise to many, sending markets and pundits scrambling, but her party has little to be shocked about if current polling is anything to go by. An average of the most recent polls from YouGov, ICM, Opinium and Ipsos MORI puts the Conservatives 15% clear of their Labour opposition, with most-cited YouGov putting this lead at 21%. The reasons are many. In particular, May is happy to capitalise on the Labour Party’s weakness – but with the opposition posed by its unpopular leadership under Jeremy Corbyn already limp without losing a few dozen seats, the secret lies in the other benefits an increased presence in Parliament would give her heading into Brexit negotiations. A victory now would mean May will not have to face the pressure of an election shortly after an EU exit deal is wrapped up in 2019; could dilute the loudest Eurosceptic voices in her party with more moderate Tories, putting her in a better position in negotiating compromises with Brussels; and could even see the Scottish National Party stymied with a small Tory revival in Scotland. Markets seemed skittish but optimistic: the pound leapt to a 10-week high against the dollar, whilst a key pound-dollar metric suggested investors have started to hedge for higher levels of volatility in the British currency.

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