Canada grandees celebrate Conservative majority
City heavyweights have lined up to express bullish excitement about the Square Mile’s prospects after the Conservatives’ landslide election win.
Boris Johnson’s self-proclaimed “stonking” majority means the UKwill leave the EU by 31 January, which pundits say will provide desperately needed clarity for the financial sector.
Read more: UK stocks surge after Conservative win ends Labour threat
Sterling rose to as much as $1.35 on Friday, its highest level since May last year, thanks to the newfound Brexit certainty and the knowledge that Jeremy Corbyn’s manifesto of renationalisation and market intervention had been rejected at the ballot box.
The domestic-focused FTSE 250 index will start trading today at its highest point all year, while the FTSE 100 also rose 1.1 per cent on Friday as banks, housebuilders and utilities all joined in the rally after the result.
City grandee and Revolut chairman Martin Gilbert said the election result gave the wider financial industry “real relief” and that Johnson would be supportive of the City.
“I think Boris when he was mayor of London was supportive of the City and I think he will continue that as prime minister,” he said
Toscafund Asset management chief economist Savvas Savouri said there was now a “real prospect a new wave of financial service firms arrive to make London their secondary home”.
He added: “The City can breathe healthy air now that the Corbyn/McDonnell nonsensical policies have been kicked into the neverland grass”.
Dean Street Advisers managing director Mervyn Metcalf echoed the sentiments, and said there was a substantial amount of deals put off due to the UK’s political uncertainty.
However, not everyone agrees,
Johnson’s win came thanks to an avalanche of votes from traditional Labour working class constituencies in the North, the Midlands and Wales.
It appears the government is already looking to shore up these seats for the long-term as it has started to publicise its plans to invest more in these regions and make a break from the David Cameron austerity years.
Hedge fund manager, and prominent Brexiteer, Crispin Odey said this spelled trouble for the City.
“If you leave London, in the main you see it’s a world of Universal Credit [welfare]… It’s a stagnant pond. Boris now will say ‘how do I get that current going?’…He has always been a believer in big government. Eventually we’ll all run out of money and interest rates will have to go up.”
Read more: Business ‘eager for clarity’ after Boris Johnson’s election win
Johnson will address the 109 newly elected Tory MPs today to run them through the government’s agenda for Thursday’s Queen’s Speech.
The government’s first piece of legislation will be his Brexit deal, but the PM will also soon enshrine in law a £33.9bn yearly increase in NHS funding.