Election Spells Trouble for Pound Sterling says de Vere's Green

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- Election "even more concerning development" than Hard Brexit

- Pound could see significant sell-off under Corbyn win

- Split remain and Brexit votes tipped to lead to split Parliament

A General Election is said to be an "even more concerning development" than Hard Brexit by de Vere Group's Nigel Green, as the Pound could see a significant sell-off under a Jeremy Corbyn win, while another split Parliament opens the door to years more of crippling uncertainty.

The call comes as UK Prime Minister Boris Johnson is said to be considering making another push for a General Election, as his plans to deliver Brexit look unlikely to pass through the current Parliament.

With a parliamentary minority that severely limits the Government's ambitions, the Prime Minister believes going back to the polls is the only route to delivering Brexit.

According to the odds market at Betfair, the implied probability of a General Election being held in 2019 has risen to 50% today, from 35% yesterday. However, the window for a December vote is fast closing, making a January election highly likely.

The prospect of a December / January election does not yet appear to have registered in a negative fashion on global currency markets, with foreign exchange markets opting to keep Sterling relatively elevated around recent highs. The Pound-to-Euro exchange rate is quoted at 1.1586, the week's high is at 1.1656. The Pound-to-Dollar exchange rate is quoted at 1.2877, the week's high is at 1.3011.

However, one financial advisor today warns the confidence holding the Pound around current levels could soon dissipate.

Nigel Green, CEO of deVere Group, says with an uncertain General Election inevitably on the way, "if you're serious about protecting your money and assets you need to take action now."

There are two key reasons why personal finances should be made "election proof" says Green.

“First, Labour leader and leftist firebrand Jeremy Corbyn might become the UK’s next Prime Minister," says Green. “His anti-business, low-profit, high-tax policies - including a possible wealth tax - can be expected to spook the financial markets, damage long-term sustainable growth of the British economy, put more pressure on UK financial assets, and lead to a significant sell-off of the Pound."

A Corbyn Government is however not the only outcome that would potentially weigh on Sterling, as another hung Parliament could spell for further delays and uncertainties.

Above: Sterling remains relatively elevated despite growing expectations for a snap General Election.

Secondly, "the election could result in a hung parliament, meaning more of the same indefinite uncertainty, deliberation and chaos. Boris Johnson might be returned as PM but without a majority," says Green. “The Brexit Party could eat into the Conservative vote as they will claim Mr Johnson did not deliver Brexit by October 31- something on which he staked his whole premiership."

Green adds that it is not just the pro-Brexit vote that risks being split as the Remain vote could be split between Labour, the Lib Dems, the Greens and the SNP.

“With both of these general election outcomes, the current unprecedented uncertainty would continue and/or intensify, further undermining confidence in the UK economy and the Pound,” says Green.

de Vere Group say wealth, jobs and opportunity-generating businesses - both in the UK and internationally - are crying out for certainty.

“Brexit uncertainty is seriously denting business investment and confidence in the UK – and the fallout of this has cost Britain three and a half years of lost opportunity and many tens of billions of pounds," says Green. “It could take a decade or so to recover, even if that recovery of certainty starts now."

The CEO says Britain is losing its edge in a competitive global economy with the Brexit deadlock and politicking. It is likely to underperform against peers for many years to come.”

“For more than a year, people and companies have been making plans for a hard Brexit. But the looming general election is perhaps an even more concerning development," says Green.

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