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Election reaction

Boris Johnson has swept back into No.10 and it’s full steam ahead for Brexit. What will a Conservative majority government mean for the economy and investment markets?
December 2019

Steven Bell

Managing Director, Portfolio Manager & Chief Economist, Multi Asset Solutions

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Boris Johnson has swept back into No.10 and it’s full steam ahead for Brexit. What will a Conservative majority government mean for the economy and investment markets?

  • Election result lifts uncertainty around Brexit ‘getting done’ but challenges remain in the months ahead.
  • The result triggered a jump in sterling, but it remains below pre-referendum levels – its valuation reflects weaknesses in the UK economy.
  • Domestically orientated shares enjoyed the biggest post-result rally – whether foreign investors choose to increase UK weightings will determine performance longer-term. 
  • We think a trade deal and the reduced likelihood of recession will encourage flows into UK equities.
  • Eyes will be on who the next Bank of England Governor is.  In the meantime, interest rates look set to remain on hold.

Risk Disclaimer 

The value of investments and any income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested.

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

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