the brexelection: what to expect?
The UK general election will take place on Dec. 12. Latest polls see the Conservative Party ahead of Labour. However, given the various difficulties in forecasting, the election result is still not a foregone conclusion. A Tory majority would likely pass the Johnson Brexit deal before Christmas, enabling the UK to leave the EU by end of January. Markets would likely respond with initial relief upon the UK parliament to finally return to a clear majority. However, PM Johnson excluded lengthening the transition period which could result in a cliff-edge by end-2020.
- Focal Point
- 05/12/2019
Highlights:
- The UK general election will take place on Dec. 12. Latest polls see the Conservative Party ahead of Labour. However, given the various difficulties in forecasting, the election result is still not a foregone conclusion.
- A Tory majority would likely pass the Johnson Brexit deal before Christmas, enabling the UK to leave the EU by end of January. Markets would likely respond with initial relief upon the UK parliament to finally return to a clear majority. However, PM Johnson excluded lengthening the transition period which could result in a cliff-edge by end-2020.
- The election may also lead to another hung parliament or a form of Labour minority government. Then, a second referendum will likely be needed to finally settle the Brexit question.
- Given the party manifestos, the election will also have important implications for economic policy. A Conservative win is unlikely to result in much additional spending beyond the September fiscal review announcements. By contrast, Labour plans are rather “radical”, but as a majority is virtually impossible, they will not be executed without major modifications.
Read the full publication below.
RELATED INSIGHTS
EQUITIES: POSITIVE RETURNS AHEAD DESPITE CHALLENGES
Equity markets have rebounded from a historical slump in Q1, with US markets even posting fresh record highs. We acknowledge the risen risks of setbacks amid loftier valuations, elevated political risks (US elections, Brexit and US-China
frictions) and Covid uncertainties into autumn.
READ NOW
COVID-19 FACTS & FIGURES
The OECD said in a report that the world’s GDP is projected to decline by 4.5%, less the 6% estimated in June. Asian Development Bank is projecting a 0.7% contraction in the economies of Asia, representing the first drop since the early 1960s.
TAKING MONETARY POLICY TO YET ANOTHER LEVEL
The presentation of the new Long Term goal and strategy
on August 27 marks a deep shift in the Fed’s monetary policy.
The new way inflation and the labour market will affect
monetary policy will result in a marked downward bias to
interest rates.
