What Do the UK Election Results Mean for the Pound and Its British Patrons?

The recent UK election result was one of the most widely debated and hotly contested in the history of politics. After five years of a Conservative and Liberal Democrat coalition, the economy was showing welcome signs of financial recovery, yet the government’s five-year long tenure had split the country in half. Many argued that inequality was too high a price to pay for a healthy bank balance, whilst others cited it as a necessary evil. But when the votes came in, it was the latter who found themselves in the majority.

PM David Cameron
photo credit: Number 10 / Flickr

However, it is not just Britain’s voters who have been impacted by this outcome. The whole of Europe has felt the repercussions, thanks to the soaring value of the pound. The financial markets welcomed David Cameron’s triumph, and our domestic currency has surged as a result.

So what does this mean for you as a Briton? The results are more wide reaching than you might have imagined…

What It Means For Entrepreneurs

For Britain’s businesspeople, this surge in the value of the pound will have a real impact, irrespective of the individual policies pursued by the Conservative government. Companies reliant on exporting will find themselves a victim of the rising rates, as foreign countries find that they get less for their money than before. On the other hand, enterprises that import goods will benefit as their relative purchasing power booms.

Will that positively impact the economy? I don’t know how you take the rising rates, but get ready for the floods of imported goods and challenged (and struggling) local makers and producers. Mixed blessings for the British economy, I suppose.

British Poundsterling

What It Means For Investors

Investors, too, will be heavily impacted by the results of the election. The financial markets have already reacted, with the value of the pound experiencing a meteoric rise. This has proved extremely profitable for many domestic investors trading the pound, although for those betting against its success this is not a welcome turn of events. Its status as a safe haven currency, however, has not only been restored, but seemingly cemented in place for the foreseeable future.

The big question is, how long will the sentiment stay?

What It Means For Holidaymakers

Holidaymakers will perhaps find themselves the most fortunate of the bunch, with the pound now buying you more than ever. The cost of holidays will fall as the pound delivers a real punch against foreign currencies and suppliers, whilst exchange rates are more favourable than they’ve been in a long while.

If you’re thinking of enjoying some sun, sea and sand, there’s never been a better time.

Overall, I think the air of optimism is always good for the economy – and for Britons. How about you? How will the Tory victory impact you and your business?