The parties have outlined a range of manifesto policies, but the following issues are key in terms of the markets’ response, post-election:
- How quickly the fiscal deficit is cut – manifestos suggest faster under the Conservatives, slower under Labour (but the effect could be counter-balanced by later/earlier Bank of England, ‘BoE’, rate hikes).
- Whether an EU referendum occurs, adding prolonged business uncertainty – ‘yes’ under Conservatives (even with LibDems), ‘no’ under Labour.
- Whether the government is broadly pro-business – the perception is ‘yes’ under Conservatives, less so under Labour, albeit the LibDems could be a moderating force.
- Whether there will be a second election – this risk is especially pertinent if the Conservatives win the most seats but cannot form a government.
The material has been provided by InstaForex Company – www.instaforex.com