The nation has spoken and one of the most dramatic elections of recent years has returned a Conservative government with one of the largest majorities since 1987.
But what will this mean for businesses, many of whom have been treading water for the past three and a half years, not only waiting for Brexit to be resolved but unable to make decisions in areas such as investment and expansion against a difficult financial outlook.
The good news is that the result at least delivers a degree of certainty and stability moving forward. A positive signal is that immediately following the result Sterling gained 1.9% to £1.34, its highest level since May last year, while the pound jumped to a three and a half year high against the Euro.
The markets also appear to have reacted positively, with the FTSE 100 share index initially rising by 1.5% and the FTSE 250 (which includes more UK focused shares) by 4%, hitting record highs.
The result has also unblocked a number of other issues that were creating confusion.
For example, last November’s delayed Budget is now likely to take place in February 2020, as previously indicated, when Sajid Javid is expected to unveil a range of tax and spend initiatives.
What we also know is that the planned reduction in Corporation Tax to 17 per cent will not go ahead while, on the other hand, the much-promised review of the Loan Charge will.
In terms of the Brexit process itself, the government remains firmly committed to implementing the Withdrawal Agreement by the end of January, although businesses are strongly advised to continue with their Brexit planning as a ‘No Deal’ scenario still remains a possibility throughout 2020. Click here for No-Deal-Brexit planning checklist…
Meanwhile, most business leaders have cautiously welcomed the clear result, but stressed that there is still some uncertainty that needs to be addressed. Click here for Business election response article…
TC is committed to helping clients and businesses understand and navigate the post-election economic landscape with in-depth advice across tax, financial planning, HR and legal services.
For further information about how we can help, call: 0330 088 7111.