UK lawmakers’ election rejection means MORE strife for the pound and UK economy
-FOR IMMEDIATE RELEASE-
October 25 2019
The Brexit-pummelled pound - the worst-performing major currency of the G10 - is going to fall further following the
Opposition leader’s instruction to his party to abstain on Monday’s general election vote.
The bleak warning is from Nigel Green, CEO and founder of deVere Group, one of the world’s largest independent financial
advisory organizations.
It comes as the leader of the opposition Labour Party has told his party to come together to block Monday’s
parliamentary vote on a general election on December 12, which was called for by Prime Minister Boris Johnson on
Thursday.
If parliament does agree to the election, in return, Mr Johnson will afford them more time to scrutinize the Brexit Bill
which was given the green-light by the House of Commons on Tuesday – but the timetable for its passing was not.
The UK’s Fixed Term Parliaments Act, (FTPA) requires that two-thirds of all 650 lawmakers must support holding a snap
election. This is the third time Mr Johnson has tried to have a general election since taking office.
Mr Green warns: “Whether it is Boris Johnson’s preferred date of December 12or a few weeks later, a general election is
looming on the horizon for the UK.
“An election in itself will create further woes for the already Brexit-battered British pound as they always fuel
uncertainty.
“We immediately saw this in action on Thursday when sterling - the worst-performing major currency of the G10 - fell
from its recent multi-month highs and took a turn lower following the announcement Boris Johnson will seek a general
election before Christmas.
“Whilst the beleaguered pound does have much of the Brexit shenanigans already priced-in, Jeremy Corbyn’s decision to
instruct Labour MPs to abstain or vote against Monday’s general election vote will ramp up the uncertainty further –
thereby extending the pound’s losses.
“Should Labour adhere to Mr Corbyn’s instructions, the PM would then not have the numbers – as abstentions count against
under the FTPA – and no election will take place on December 12. This begs the question: when will the election take
place?”
He continues: “The significant drop in the value of the pound since the referendum has contributed to reducing people’s
purchasing power and a drop in UK living standards. Weaker sterling means imports are more expensive, with rising prices
being passed on to consumers.
“The fall in the pound is good for exports some claim, but it must be remembered that around 50 per cent of UK exports
rely on imported components. These will become more expensive as the pound falls in value.
“A low pound is, of course, bad news for British holidaymakers, travellers abroad and the millions of British expats –
with holidays and living/retirement overseas more expensive.”
Mr Green goes on to add: “Furthermore, the Brexit deadlock continues which is causing the UK economy to haemorrhage
investment, confidence and opportunity.
“Job-generating, tax-paying, wealth-creating businesses need certainty.”
The deVere CEO concludes: “It’s an abuse of the democratic system for the opposition to not allow a general election to
take place to break the deadlock.
“Many voters will believe that the reason why Jeremy Corbyn is pursuing this path is that despite the most chaotic
political turmoil this country has faced in generations led by the ruling Conservatives, he is still unlikely to win a
general election.”
“Mr Corbyn and others need to stop playing games. The pound and the UK economy are losing their edge in a competitive
global economy with the grinding Brexit politicking.”
-ENDS-