Stuart Clark, portfolio manager at Quilter Investors, comments:
“The Conservatives have achieved their aim and have won a sizeable majority in parliament. As a result we have seen an immediate repricing of GBP reflecting this result and would expect this to follow through into the more domestically oriented parts of the market.
“This new found confidence could quickly fade, though, with the realisation that the Prime Minister has an enormous amount of work to do to ensure the UK does not inadvertently leave without a deal before the end of the transition period, which is currently slated for the end of 2020. It remains to be seen whether Mr Johnson is committed to that date and a ‘hard Brexit’, or whether the strength of this victory allows him to step back from the harder right and negotiate a closer working relationship with the EU.
“This trade deal negotiation process does seem to be a risk that is currently ignored by markets, instead deciding to focus on the short-term, looming Brexit deadline.
“The combination of this result and the potential delay to further tariff increases between the US and China leaves a positive environment for riskier assets in the immediate term but Investors need to make sure they are positioning themselves for further volatility to enter the UK and global markets through 2020”
Jon Greer, head of retirement policy at Quilter, says:
“With the latest general election regular parliamentary process yet again came to a grinding halt. With the Conservatives finally securing a majority, we need the Government to snap into action and deliver on some long awaited promises. The Pensions Bill, which includes the pension dashboard, was finally going to get the last seal of approval before the election, meanwhile most people have given up on the social care green paper as a lost cause.
“With the political posturing over hopefully these policy areas will get the attention they deserve. And with a Queen’s Speech just a week away we could get clarity sooner rather than later. However, the dreaded B word will likely mean we still have some time to wait for any meaningful change.”