THE POUND is set to soar and billions of pounds of pent up business investment will be unleashed following the Conservative Party’s general election triumph, according to a leading business figure.
However, there are many serious challenges ahead, according to the CEO of one of the world’s largest independent financial advisory organisations.
Nigel Green, chief executive and founder of deVere Group, commented: “The pound has enjoyed its biggest surge in a decade on the hopes that a solid Conservative majority can finally end the Brexit deadlock.
“Many traders were caught off guard by the size of the majority and this may push the pound even higher than previous predictions. We could see bullish traders now take it to $1.38 or maybe even as high as $1.40.”
He continued: “With more political certainty due to the large majority, the UK economy is also likely to receive an election bounce.
“Billions of pounds in business investment that has been on the sidelines due to the parliamentary paralysis is now ready to be unleashed. This will give a much-needed boost the slowing British economy.”
The deVere CEO added: “It now looks more likely that Boris Johnson will indeed be able to ‘get Brexit done.’
“His party’s large majority in the Commons helps him pass his Brexit deal and it gives him more political sway when negotiating the UK’s future relationship with the EU and reducing the risk of no-deal at the end of 2020.
“However, there’s still a long way to go. Mr Johnson’s self-imposed end of December 2020 deadline is a mammoth challenge, and a no-deal Brexit is still possible on 1st Jan 2021.
He added: “The result election also puts a question mark over Scotland’s future in the United Kingdom. The SNP’s gains will embolden them in their key aim of securing Scottish independence.
“Mr Johnson’s monumental task to deliver Brexit with a deal and the Scotland issue will continue to fuel uncertainty in 2020.”
Mr Green concludes: “Boris Johnson’s election gamble has paid off. Christmas has come early for the pound, the British economy and UK financial assets.
Neil Wilson Chief Market Analyst for Markets.com said: “The Conservative Party has secured an historic mandate with a thumping victory, providing clarity for investors where there was confusion.
“For the markets and for business this is the perfect result – a clear majority for the Tories, the Corbyn risk nullified entirely, a major reduction in uncertainty around Brexit and even a quick Budget to inject the economy with some added impetus.
“The only doubts are around the next phase of Brexit – the future relationship – but with a large majority the government will be in a better place to negotiate and do what it needs to do.”
Andrew Montlake, managing director of the UK-wide mortgage broker, Coreco, said: “This decisive General Election result could deliver a massive adrenaline shot into the UK property market.
“Expect a sharp uplift in transaction levels starting early in 2020, as buyers and sellers who have played it safe put their plans into motion. Spring for the property market could come early after this comprehensive election victory.
“There is a huge amount of pent-up demand out there that looks set to be unleashed on the market next year.
“Although a lot of the hard work around Brexit has yet to be done, there is now a political stability that will give a lot of people the confidence to get on with their lives.
“The fact that borrowing costs are ultra-low gives people even more reason to buy and sell.
“Not so long ago, Brexit looked like bad news for bricks and mortar, but people will now be relieved it can finally be put to bed.
“With so much red turning blue, the property market could be at the beginning of a long Brexit bull run.”
Jerald Solis, Business Development and Acquisitions Director of Experience Invest, said: “Despite winning a majority, the Conservative party should view this only as a minor victory. Whilst this was dubbed a ‘Brexit Election’, the public has made it clear that other pressing issues must be pushed to the forefront of the newly elected government’s agenda, such as the housing crisis.”
Responding to the result of the General Election, Jonathan Geldart, Director General of the Institute of Directors, said: “Business as a group within society does not decide elections, but in the coming days leaders of companies large and small will be responding to the new situation.
“After years of parliamentary chaos, directors want to see a Government that is clear-sighted about the challenges facing businesses, and ambitious, but realistic, in its response. British companies have been resilient amid the confusion, but they are eager for some clarity now.
“Business leaders’ thoughts will immediately be turning to Brexit. For directors, ‘Get Brexit Done’ will only have meaning once the details of our long-term future relationship with the EU are clear, they need a framework to plan for the future from.
“The Prime Minister must resist the urge for arbitrary negotiating deadlines, and should commit to a proper adjustment period that starts when businesses know the full detail of what changes they may be facing. Our members have made clear that the content and shape of any new deal are much more important than simply the speed in getting there.
“On the domestic front, we must now see progress on the challenges that have been holding the economy back, from skills to infrastructure. Many directors will be waiting for action on manifesto commitments such as incentives for R&D investment and business rates reform. Meanwhile, there are still big question marks around the Conservatives’ plans on immigration and big-ticket infrastructure projects.”
Carolyn Fairbairn, CBI Director-General, said: “Congratulations to Boris Johnson and the Conservative party. After three years of gridlock, the Prime Minister has a clear mandate to govern. Businesses across the UK urge him to use it to rebuild confidence in our economy and break the cycle of uncertainty.
“Employers share the Prime Minister’s optimism for the UK and are ready to play a leading role. They can bring the innovation, investment and jobs for a new era of inclusive growth. The biggest issues of our times – from tackling climate change to reskilling the workforce for new technologies – can only be delivered through real partnership between government and business.
“The starting point must be rebuilding business confidence, and early reassurance on Brexit will be vital. Firms will continue to do all they can to prepare for Brexit, but will want to know they won’t face another no deal cliff-edge next year. Pro-enterprise policies on immigration, infrastructure, innovation and skills, will help relaunch the UK on the world stage.
“Despite recent challenges, the UK remains a great place to start and build a business. A new contract between enterprise and government can make the UK a global magnet for investment, powering higher productivity and living standards across the UK.”