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11th June 2017 | Dubai
This election was Ms Theresa May’s to lose, and she did. The blame must be put squarely on her as the campaign was centered on her person as the sole “saviour” of the UK post-Brexit. Clearly, the population was not convinced. Moreover, the population seemingly wants to put Brexit behind it, in spite of the fact that it still lies firmly in the future. Centering the campaign on this issue failed to inspire, and voters were much more moved by the issues of jobs and healthcare championed by Labour’s leader Mr Jeremy Corbyn whose party went on to capture 29 new seats. As the voting system is first-past-the-post and not proportional, it was possible for the Conservatives to give up seats in spite of increasing their share of the vote by 5.5%. Preventing the Tories from rejoicing over that fact, the Labour Party saw even greater gains in their share of votes which rose by 9.5%.
The second big loser was the Scottish National Party which ceded 21 seats. This strongly suggests that the population is in no mood to revisit the independence issue.
The third victim was UKIP which was ejected from parliament in yet another sign that Brexit is no longer a priority even to the roughly half of the population that voted in favour of leaving the EU in 2016.
The Liberal Democrats gained four seats but they too can be considered to have done poorly, again because of the failure to make Brexit a key issue, as their key point in this campaign was to offer British voters a second referendum on the issue. Many had expected the Lib Dems to do even better in this election on that score.
The Green Party lost 2% of the vote compared to 2015 but managed to hang on to their seat in parliament.
In Northern Ireland, Sinn Fein performed strongly.
All in all, there was only one big winner in this election and that was the Labour Party, but voters nevertheless had doubts about that party’s ability to govern and the result is a hung parliament with no party having cleared the 326 seat hurdle for an outright majority. This happened last in 2010. As a result, uncertainty has increased, instead of decreased as was Ms May’s aim.
The outlook for the economy takes a hit from this outcome. GDP growth will arguably be slower as uncertainty weighs on investment and consumption, and a weak future government is likely to find it difficult to push through significant reforms. Risk-averse investors might wish to stay away until the horizon clears somewhat. That said, there are always opportunities in volatile markets and the UK is still an economy of 65 million people and it will not implode – rather, there might simply be better investment opportunities elsewhere.