The people of Great Britain have spoken and Boris Johnson has officially been re-elected as Prime Minister. With Brexit looking more likely to happen in the near future, the investment market experienced a surge in response. The following increases were seen this morning in the wake of the election:
- UK 10-year gilts rose from 0.71% to 0.82%
- Sterling rose by 4%, rising to US $1.34 this morning
- The FTSE rose by 2.9% when compared to the MSCI World Index, giving us a clear window into the UK economy
What Can I Expect to See Happen Over the Next Few Months?
You can expect to see many exciting movements occur in anticipation of a Brexit deal being passed. Investors, both at home and abroad, now know the direction the UK economy and trade are heading in. This means that many investors, especially UK ones, are happy to inject cash back into the economy. UK-based businesses, such as banks and homebuilders, will benefit the most from this and British companies will once again be able to invest in their future and growth.
We also expect to see overseas investors return to the UK market. Their return depends on the increase in sterling, but we do expect international shares to rise. Investors may want to factor in the risk of securing a new trade deal once England leaves the EU, so prepare to see a rise in UK equities and sterling caps.
Should I Invest?
If you want to invest in sterling, UK equities or international shares, now is the time to do so. We suggest that you avoid investing in UK gilts, as their returns are currently quite low. Should you decide to invest, we highly recommend that you invest wisely and don’t invest large sums of money just because the market experienced a surge due to the UK general election.
Need Investment Help?
Headway Wealth offers the independent financial advice needed to help you invest wisely after this historic election. We offer a wide range of advisory services to help you manage your financial affairs quickly and conveniently, wherever you reside. You won’t find our fresh and modern approach to finance at other financial firms, so contact us to discuss your investment options today.
