As the voting closed and the results began to come in, strongly suggesting that the government will be led again by David Cameron, the FTSE 100 rose over 1.5 per cent in this morning’s trading. With the likelihood that the Conservatives will command a clear majority, investors are relieved at the fact that banks may not have to pay additional levies. UBS released a research note which said that ‘weeks of uncertainty and horse-trading [will be avoided] as there is the ability for the Conservatives to form a government perhaps relatively quickly.’
In the aftermath, the pound is rose nearly 2% to $1.55 against the dollar, which is almost the highest it has been in two months. This is thought to be due to the fact that the government’s agenda will remain relatively constant. However, it has been expressed that due to the potential EU referendum that is now likely to be held in the future, the rise in the British pound may not stick.