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Multi-Asset Blog - Mayday UK Election

Sunday, July 09, 2017

Will Bartleet, CIO and Portfolio Manager of Pacific Multi-Asset

Politics has not lost its power to bamboozle pollsters and surprise markets. What was meant to be an opportunity to secure a strong conservative majority, now looks like a seriously rash move. Theresa May’s conservative government has been forced to attempt to form a coalition with the Democratic Unionist Party to secure a parliamentary majority. If they fail to reach an agreement, there is every possibility that the UK voters will be back at the polling stations later in the summer.

Even if a coalition is formed, the two parties will have to agree on their approach to Brexit negotiations before formal talks begin on 19th June. The DUP have so far taken a softer position on Brexit than the Conservatives which suggests that an ultra-hard Brexit, “no deal is better than a poor deal” may be avoided.

This is another shock result for the UK but the global market impact is likely to be limited. The FTSE 100 is dominated by international companies and so remains broadly insulated from any impact this uncertainty may have on the UK consumer. We continue to believe that it is Sterling that will reflect the uncertainties surrounding the Brexit negotiations, which have only increased as a result of this election.

IMPORTANT INFORMATION | Issued and approved by Pacific Capital Partners Limited, a limited company registered in England and Wales, authorised and regulated by the Financial Conduct Authority . The information contained herein is not approved for use by the public and is only intended for recipients who would be generally classified as investment professionals. Information or opinions contained in this article do not constitute an offer to sell or a solicitation, or offer to buy, any securities or financial instruments or investment advice or any advice or recommendation in respect of such securities or other financial instruments. Where past performance is shown it refers to the past and should not be seen as an indication of future performance.


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