The financial implications of the Tories’ election victory

It was the general election outcome that no-one expected.  But what did the Conservative win mean for the financial world – and, more importantly, your investments?

Essentially, the financial markets reacted positively to the news the Conservative Party had won a slim majority in May’s General Election.  The markets like certainty, and while David Cameron may only have a slim majority, it’s enough to mean he should be able to bring in his policies. 

Taken by surprise

Investors, like all the pollsters, had generally been expecting another hung parliament and therefore financial markets had not really factored in the possibility of an outright majority.  As a result, share prices rose with relief as the predicted uncertainty of coalition negotiations was removed.  In particular, the news provided a boost for share prices in the banking, energy and house building sectors, which had all been expected to come under pressure from a Labour government.  Labour had promised to enforce further regulation on the banking sector and to impose new regulation on the energy and property markets.

Short-term confidence boost

For now, at least, the election result has provided a certain amount of clarity amid hopes by the markets that current government policy will remain in place. This clarity is expected to deliver a short-term confidence boost for investors and is also likely to provide support for business investment in the longer term.

Future uncertainty

Although the General Election result removed the immediate uncertainty that would have been caused by a hung parliament or a minority government, there is plenty of uncertainty on the horizon to keep the markets on their toes.  The thorny questions of the UK’s role within Europe and Scottish independence mean the potentially shifting political landscape will continue to impact on investments.

Looking ahead to the unknown is part of the service offered by Core.

For expert financial planning advice, call Graham on 07740 192505 or email gkinns@coreifa.co.uk to book a no-obligation consultation at our expense