The impact of May’s resignation on the UK economy

Following Theresa May’s resignation speech on 24th May, before the start of the bank holiday weekend, the Conservative Party leadership contest sprang into action.

When the candidates have been whittled down to just two, the final say on who will become the new Conservative Party leader and prime minister will be down to Conservative Party members (you must have been a Conservative Party member for three months to have voting rights). The winner of the Conservative Party leadership race will need to find a solution that speaks to all, in a currently polarised party. Possibly one of the toughest challenges they will face is to win the confidence of the House of Commons where the majority are opposed to a no-deal Brexit.

Boris Johnson, who is the favourite to succeed Mrs May, recently wrote in his Daily Telegraph column that “No one sensible would aim exclusively for a no-deal outcome. No one responsible would take no-deal off the table.”

The increased risk of a no-deal Brexit has posed potentially grave implications for the UK economy. Azad Zangana, Senior European Economist and Strategist at Schroders, stated late last week that, “If this were to happen, we would anticipate the economy to slow and fall into recession around the turn of the year.”

Jeremy Corbyn, leader of the Labour Party, is quoted as saying that whoever becomes the new prime minister should call a general election to, “let the people decide our country’s future”.

Mrs May will continue in the role until the new prime minister is elected. At the time of writing, the predictions are that sterling is likely to remain volatile and subject to downside risks as the future of Brexit’s direction is debated. It remains to be seen exactly how the future of the leadership contest, and the extent of the implications on the UK economy, will play out over the coming months.

Articles on this website are offered only for general information and educational purposes. They are not offered as, and do not constitute, financial advice. You should not act or rely on any information contained in this website without first seeking advice from a professional.

Past performance is not a guide to future performance and may not be repeated. Capital is at risk; investments and the income from them can fall as well as rise.

You are now departing from the regulatory site of Finura. Finura is not responsible for the accuracy of the information contained within the linked site.

Sources:
https://www.schroders.com/en/uk/tp/economics2/economics/may-resignation-raises-uk-recession-risk/
https://www.ipe.com/brexit/brexit-uk-recession-warning-as-prime-minister-quits-party-leadership/www.ipe.com/brexit/brexit-uk-recession-warning-as-prime-minister-quits-party-leadership/10031347.fullarticle
https://www.bbc.co.uk/news/uk-politics-48411784
https://www.bbc.co.uk/news/uk-politics-48399201

Other News

Draft regulations published regarding maturing child trust funds

Draft regulations have been published that will mean the funds in maturing Child Trust Fund accounts can retain their tax-advantaged status after maturity.

Using Trusts as Part of an Inheritance Tax Planning Strategy

There is a common misconception that trusts are only used by the wealthy. However, they are accessible to all and can be a useful tool as part of a wider inheritance tax planning strategy. There are various reasons why a trust may be set up; some can be written into your Will and others can be set up independently. Here we explain what trusts are, what they do and the different types of trust available.

Tips For Effective Intergenerational Financial Planning

Traditionally parents would bequeath their assets to their surviving spouse and subsequently their children. But, as we live longer, there are increasing opportunities to use intergeneration financial planning which includes grandchildren and great grandchildren too.