General Election anyone?

No 10 officials have warned a snap election could be on the horizon.

Article updated: 3 September 2019 8:00am Author: Ian Forrest

I think it’s fair to say that few people outside Westminster, including Brenda from Bristol, would be happy to see a general election if one should be called soon. But given his wafer thin majority in Parliament and the rebellious comments of some of his MPs, it is understandable that the Prime Minister is considering it.

Whether Brexit has happened or not before polling day, predicting the outcome is very difficult because both main parties are likely to see a sharp drop in support.

If Brexit has not happened I sense that many people who voted Remain in 2016 are now fed up with the uncertainty being caused by the endless delay in its implementation and want Brexit to happen. Adding them to Leavers could mean a big move towards the Brexit Party. That might mean a right of centre coalition with the Conservatives which would also likely lead to a No deal Brexit.

If a No Deal exit has happened before polling day there could be a big protest vote by Remainers favouring parties such as the Lib Dems. Labour may also benefit, although some of its supporters may blame it for not preventing No deal. Despite that this could result in a left of centre coalition.

The only way to avoid those outcomes is if a withdrawal agreement is struck soon with the EU, which seems highly unlikely once an election campaign is underway and the thorny issue of the Irish backstop remains.

Either way it seems unlikely that many voters will be able to focus on more domestic issues and especially the potential damage which could result from Labour’s economic policies such as re-nationalising large swathes of the stock market. Investors might favour the first outcome, but it may only be marginal given the No deal implications. More certain is that the market will remain volatile for some time yet.

While the Conservatives hold a convincing lead over Labour in the polls at present general elections can have unpredictable outcomes, as Theresa May discovered to her cost in 2017. Many a slip twixt cup and lip, as they say.

These views are those of the author alone and do not necessarily reflect the view of The Share Centre as a whole.

Ian Forrest portrait photo
Ian Forrest

Investment Research Analyst

Ian’s background in investments, financial journalism and research has seen him advising private investors on equities and helping to manage portfolios. His qualifications include the Certificate in Financial Planning and the Chartered Institute for Securities & Investment’s Investment Advice Diploma.

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