UK General Election Result – What are the finance experts saying?

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It’s a hung Parliament – the Conservatives have won the UK general election, but not the overall majority.

Here’s an overview of what some financial commentators are saying about the election result:

Tom Stevenson, Investment Director for Personal Investing, Fidelity International

“The market reaction to this unwelcome outcome is likely to hit UK shares, bonds and the pound. Markets will likely remain on the back foot while the difficult job of putting together a workable government is undertaken. This is when a well-diversified portfolio comes into play. The case for a well-balanced portfolio, geographically and by asset class, has never been stronger.”

Justin Urquhart Stewart, Co-founder and Head of Corporate Development, 7IM

“HMS Britain is rudderless, directionless and shortly leaderless. Not a good strategy for the economy… Investors hold hard and remember the importance of your compounded returns of your dividends on your broadly diversified portfolio.”

Mark Dampier, Head of Investment Research, Hargreaves Lansdown

“I see no need to make any rash investment decisions, given the range of possible outcomes over the next few weeks. Investors should sit tight or even buy if the opportunity arises. Overseas investment is unaltered by the election apart from changes to sterling which should act positively as we have seen over the last 12 months.”

Saker Nusseibeh, Chief Executive, Hermes

“The expected reaction is for both sterling to come down and possibly the FTSE, notwithstanding sterling’s fall. We are likely to also see forward markets discounting rises in interest rates which will adversely impact the consumer in the short term as mortgage rates could start to rise further and faster than most borrowers budgeted for.”

Azad Zangana, Senior European Economist, Schroders

“The fall in the pound has been smaller than expected… at the margin, lower sterling will push up inflation a little further than previously forecast, which will have a small negative effect on household spending. The Bank of England is unlikely to change its policy in the near-term but it will offer reassurance that it stands ready to act in the event of financial instability.”

Steve Webb, Director of Policy, Royal London

“Reforming the funding of social care will almost certainly be kicked into the long grass as will any big shake up of pension tax relief… even policies such as ending the triple lock or means-testing the Winter Fuel Payment will be called into question.”

Richard Parkin, Head of Pensions Policy, Fidelity International

“Like most others, the pensions industry needs certainty and today’s result gives us anything but that… it seems that any reform of pension tax relief will remain on the Conservative back burner though economic circumstances may force it on to the agenda. Following through on the Cridland recommendations on State Pension Age and the proposed abolition of the triple-lock now look difficult and given the severe reaction to the long term care funding proposals we can expect little here any time soon.”

Lauren Kemp, Senior Manager of Investment & Communications, London Central Portfolio

“There will undoubtedly be an impact on the UK and London housing markets… the UK looks set to face an extended period of uncertainty, historically unattractive to inward investment. For the domestic housing market, outside Prime Central London, the recent evidence of a downturn by most data analysts, due to concerns over a weakening UK economic position and rising inflation, is unlikely to be reversed in light of the current events.”

Steven Andrew, Macro Fund Manager, M&G Investments

“It is tempting to conclude that a ‘hard Brexit’ is now ruled out… it is wholly inappropriate to draw conclusions on a ‘hard’ or ‘soft’ Brexit in incremental stages based upon the supposition that the latest information we have provides us with insight into the eventual outcome – especially when it totally disregards the stance of the other side of those negotiations.”

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