Pro-biz Cameron’s return to power revs up UK stocks, £
London’s stock market rallied and the pound surged on Friday as Prime Minister David Cameron’s “business friendly” Conservatives claimed a surprise victory in Britain’s general election. The benchmark FTSE 100 index jumped 1.83 per cent to stand at 7,013.0 points in midday deals, lifted by soaring share price gains for banks and energy majors.
Among the biggest winners were energy firm Centrica, up 7.50 per cent to 276.70 pence and state-rescued Lloyds Banking Group, up 6.56 per cent to 87.53 pence, with the Conservatives seen as being less tough on regulating the financial and energy sectors compared with the Labour party, which will stay as the main opposition party. “The Conservatives are seen as being more business friendly and more importantly, offer continuity in a country that last year experienced the fastest rate of growth in the G7,” Craig Erlam, senior market analyst at Oanda trading group, said on Friday.
As the results rolled in, forecasts of a close contest between the Conservatives and Labour turned out to be wide of the mark, with Cameron on course to win a majority in parliament and secure five more years in Downing Street. The outcome sent the British pound soaring to USD 1.5423 from USD 1.5262 late in New York on Thursday. The euro was down at 72.71 pence from 73.82 pence. The European single currency fell to USD 1.1215 from USD 1.1266 on Thursday. “A night of victory for the Conservative party has put UK markets on the front foot, with sterling and the FTSE moving higher,” said Chris Beauchamp, senior market analyst at IG trading group. “For investors, the results... mean that they can cease worrying about the UK economy, and focus on the other areas of concern, like Greece and whether the Fed will hike rates this year.” “The result removes the risk that the economy suffers a prolonged period of political uncertainty,” said Vicky Redwood, chief UK economist at Capital Economics research group.
As well as the Conservatives, the other big winners were the pro-independence Scottish National Party, which won 56 of the 59 seats in Scotland. The success of the SNP could increase pressure for a fresh referendum on Scottish independence, even though that was rejected just last September. An overall victory for the Conservatives will meanwhile trigger a referendum on Britain’s membership in the EU by 2017.
Meanwhile, Britain’s top politicians took part in commemorations on the 70th anniversary of Victory in Europe Day on Friday, just hours after a dramatic election that left the Opposition in disarray. Conservative leader David Cameron laid a wreath at the Cenotaph war memorial in central London, close to the Downing Street office that he will again occupy after confounding the pollsters to comfortably keep his job as prime minister. He was flanked by outgoing Labour leader Ed Miliband and Liberal Democrat chief Nick Clegg, who both quit shortly before the ceremony after their parties were routed at the polls. Triumphant Scottish National Party chief Nicola Sturgeon, whose party demolished Labour north of the border, also laid a wreath during the ceremony, as did Queen Elizabeth II’s son Prince Andrew.
With the Tories securing an outright majority, it is a far cry from pre-poll predictions that the event would be held amid political horse trading to form a coalition. Putting the politics to one side, the country fell silent for two minutes at 2 pm GMT, marking the moment when wartime prime minister Winston Churchill broadcast his historic speech announcing the end of the conflict. Following six years of air raids, blackouts, economic hardships and fighting that claimed the lives of almost 400,000 Britons, the country seized the chance to celebrate the end of the war on May 8, 1945, with even the future Queen Elizabeth II anonymously joining the ecstatic throngs in central London. “It took a couple of days to really sink in,” 101-year-old veteran John Harrison recalled.
“All you could hear were church bells, which were marvelous,” the former officer on board the HMS Belfast warship told AFP. “When the news came... my team said, ‘Well, there’s only one place (to be), I think John, and that’s the nearest pub.’ It was such a relief. If we hadn’t done the things we did, God knows what the regime would have been like.”