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| Version 4 | Version 5 |
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| UK economy now in the fog of election uncertainty | UK economy now in the fog of election uncertainty |
| (11 days later) | |
| When it closed for business on election day, the City of London was in confident mood. Theresa May was Margaret Thatcher. Jeremy Corbyn was Michael Foot. Labour’s manifesto was, if not the longest suicide note in history, the second longest. Opinion polls were pointing to a Tory majority of about 100, which is what Thatcher got in her second general election victory. | When it closed for business on election day, the City of London was in confident mood. Theresa May was Margaret Thatcher. Jeremy Corbyn was Michael Foot. Labour’s manifesto was, if not the longest suicide note in history, the second longest. Opinion polls were pointing to a Tory majority of about 100, which is what Thatcher got in her second general election victory. |
| By 10pm when the results of the exit poll were released, it dawned on the City that this was not a rerun of 1983 but of 1974. May was not Thatcher, she was Ted Heath, a prime minister lacking the human touch who had called an election when there was no need to do so. With a hung parliament pointing to the possibility of a second general election within months – another echo of 1974 – the markets responded in predictable fashion by dumping the pound. | By 10pm when the results of the exit poll were released, it dawned on the City that this was not a rerun of 1983 but of 1974. May was not Thatcher, she was Ted Heath, a prime minister lacking the human touch who had called an election when there was no need to do so. With a hung parliament pointing to the possibility of a second general election within months – another echo of 1974 – the markets responded in predictable fashion by dumping the pound. |
| The City hates uncertainty but it has now got uncertainty in spades. Brexit talks are supposed to start the week after next and it is uncertain whether May will still be leading the team by then. May’s plan to strengthen her hand in the negotiations by increasing her majority has been an abysmal failure. There are now obvious and serious questions being asked about what the final deal will look like and whether the article 50 talks can be completed within the two-year deadline. Unsurprisingly, the CBI expressed concern at an outcome that is bound to make business warier about investing. | The City hates uncertainty but it has now got uncertainty in spades. Brexit talks are supposed to start the week after next and it is uncertain whether May will still be leading the team by then. May’s plan to strengthen her hand in the negotiations by increasing her majority has been an abysmal failure. There are now obvious and serious questions being asked about what the final deal will look like and whether the article 50 talks can be completed within the two-year deadline. Unsurprisingly, the CBI expressed concern at an outcome that is bound to make business warier about investing. |
| Life is only going to get more difficult for the Conservatives, assuming that they manage to cling on to power as a minority government. | Life is only going to get more difficult for the Conservatives, assuming that they manage to cling on to power as a minority government. |
| One reason May lost rather than won seats was that the country has had enough of austerity and is fed up with working ever harder for little reward. | One reason May lost rather than won seats was that the country has had enough of austerity and is fed up with working ever harder for little reward. |
| Political history suggests that sitting governments tend to do well when living standards are rising – as they were in 2015 - and badly when they are falling. On that basis, this was a supremely daft time to hold an election, because prices are going up more quickly than wages, which are still lower in real terms than they were seven years ago. | Political history suggests that sitting governments tend to do well when living standards are rising – as they were in 2015 - and badly when they are falling. On that basis, this was a supremely daft time to hold an election, because prices are going up more quickly than wages, which are still lower in real terms than they were seven years ago. |
| Far from helping the Conservatives, the terrorist attacks in Manchester and London merely served to make voters wonder about the wisdom of cuts in police budgets in an attempt to hit deficit-reduction targets that have not been met. | Far from helping the Conservatives, the terrorist attacks in Manchester and London merely served to make voters wonder about the wisdom of cuts in police budgets in an attempt to hit deficit-reduction targets that have not been met. |
| Certain things are clear despite the fog of uncertainty. First, the idea of balancing the budget has retreated further into the distance. A minority government will be looking to hand out goodies to the voters rather than squeeze them further. | Certain things are clear despite the fog of uncertainty. First, the idea of balancing the budget has retreated further into the distance. A minority government will be looking to hand out goodies to the voters rather than squeeze them further. |
| Second, the fall in the value of the pound will intensify the squeeze on living standards, making it even more likely that there will be soft-pedalling on austerity. | Second, the fall in the value of the pound will intensify the squeeze on living standards, making it even more likely that there will be soft-pedalling on austerity. |
| Third, Philip Hammond is safe in his job because May is not strong enough to sack him. | Third, Philip Hammond is safe in his job because May is not strong enough to sack him. |
| Finally, the prospect of a Brexit deal under which the UK stays in the single market has increased. | Finally, the prospect of a Brexit deal under which the UK stays in the single market has increased. |
| Economics | Economics |
| Sterling | Sterling |
| General election 2017 | General election 2017 |
| Brexit | Brexit |
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