THE result of the general election has received a relatively positive early reaction around the industry.
The pound jumped by the most in nearly three years on the first sign of the scale of the Conservative party victory and the Financial Times reported a rise in shares in companies that rely on the domestic British economy.
Investors pared back their bets on the Bank of England cutting interest rates as the uncertainty about the way ahead for Britain’s economy lifted, at least in the short term.
Guy Foster, head of research at wealth manager Brewin Dolphin, told the BBC that the potential for a smooth Brexit removes some of the downside risk for the UK economy”.
“This should be positive for both business and consumer confidence, at least in the short term, with a gradual acceleration in GDP growth and confidence.
“However, a lot can change over the coming months as the finer detail of the UK’s future trade relationship with the EU is negotiated.”
Andy Scott, associate director at financial risk adviser JCRA, said: “What will be interesting to see – assuming that Brexit will now follow a set course, is if economic data is given a significant boost from the perceived certainty.
“In recent months, the market has almost completely ignored the slowdown in the economy and the potential for monetary stimulus from the Bank of England, with election and Brexit expectations driving fluctuations in sterling’s value.
“The performance of the economy is likely to be key to whether we see a further recovery in 2020.”
Luke Davis, Chief Executive of IW Capital, an investment house that funds small businesses said: “Investors and entrepreneurs will be pleased to see this result – not least because of Labour pledges to raise both income and corporation taxes.
“What SMEs will want to see now is certainty around leaving the EU so that they can grow and scale with confidence. There is a tremendous amount of ambition in the small business community and especially in innovative entrepreneurs – we hope to see the Tory government support this community.”
Jenny Tooth CEO of the UK Business Angels Association added: “We can only hope that the next government will continue to support the angel and early-stage investment across the UK and will recognise the important role that our community plays in backing innovation and growth.
“The SME economy is a significant driver of growth and job creation in the UK; supporting them will be a key factor in overall economic growth that the government needs to address.”
Result will bring stability
Nick Ratcliffe of the Leasing Broker Federation said the result brings stability back to the market.
He added: “With financial stability SMEs will start to feel a bit more safe about their future and we can look forward to growth in the leasing broker sector.”
Paul Hollick, chairman of the Institute Of Car Fleet Management said the fact that Britain now has a majority Government provides clarity and a “distinct route for the journey ahead, while putting an end to the political and business uncertainty of recent years.”
He added: “The fact that the Conservative Party remains in power means that we can expect legislation, such as that relating to previously announced company car benefit-in-kind tax rates from April 2020, to be passed as previously announced.
“What’s more the mandate that Prime Minister Boris Johnson now has should enable the UK to leave the European Union on January 31, as the Conservative Party promised, and have a trade deal in place by the end of next year thus ensuring that the UK is tariff-free.
Caroline Sandall, chairman of the Association of Car Fleet Operators, said the election result ends the “political paralysis of the last three-and-a-half-years, which has been dominated by Brexit.
“As a result I hope that we will now see legislation, such as the outstanding Finance Bill, passed that puts into law the already announced company car benefit-in-kind tax rates for the three financial years starting 2020/21.
“What’s more, with the Conservative Party promising a Budget in February, ACFO looks forward to strong, coherent – not uncoordinated – policies that address poor air quality that impacts on everyone and a clear strategy to support the motor industry to reduce vehicle emissions and the overall environmental impact of transport.
“Finally with the Prime Minister promising to ‘get Brexit done’ by January 31, ACFO looks forward to a strong trade deal with the European Union being negotiated by the end of 2020 that supports the robust UK automotive sector, which is crucial as we move into a new political and technological arena.”
