May the force's not with her

What UK Prime Minister Theresa May expected as a landslide win at the snap 8 June general elections turned out to be a slide at the polls for the Conservatives instead.

The British prime minister intended to secure her Brexit mandate when she announced the elections on the 18th of April, because "The country is coming together but Westminster is not. Labour have threatened to vote against the final agreement we reach. The Lib Dems have said they want to grind the business of government to a standstill. Unelected members of the House of Lords have vowed to fight us every step of the way."

PM May expected to boost the Conservatives' slim majority of 17 seats to as much as 140 based on current polls (as 'The Guardian' newspaper reports citing "election expert Michael Thrasher).

Instead, and akin to the Brexit referendum result, UK voters once again proved the polls wrong. Latest counting showed that May's Conservative Party has lost its slim majority and with only 318 seats won, needs another eight to form an outright majority. Labour won 262 and the Northern Irish Democratic Unionist Party (DUP) got 10 seats. Current speculations are that May herself could lose the prime ministership.

The stability and stronger mandate May was hoping for going into Brexit negotiations have, given the election results, increased Brexit uncertainty.

This sent the British pound down. Sterling's effective exchange rate dropped by 1.4% the day after the 8 June elections, for a total depreciation of 12.2% since the Brexit vote of 23 June 2016.

Sterling depreciated against its major currency counterparts after the elections: it fell by 1.6% versus the US dollar; it went down by 1.3% against the euro and by 1.1% vis-a-vis the Japanese yen.

It wasn't all bad news though. The FTSE 100 index rose by 1.0% the day after the elections, for a 5.4% gain this year to 9 June, as the increased uncertainty prompted by the snap elections results was more than negated by the British currency's depreciation - one that would improve UK exporters' competitiveness and increase foreign earnings when converted back into local currency.

UK exporters' prospects are further enhanced by the increased prospect of a "soft Brexit" - where the country would remain in the European Union's (EU) single market and customs union. As Bloomberg put it, "May wouldn't have enough votes in Parliament to support her vision of a hard Brexit, and would find it very difficult to pass laws, one minister said. This means the kind of deal she seeks with the EU will inevitably be softer."

Read more: BrexitEUConservativesSterlingUK Prime Minister Theresa MayEuropean UnionFTSENorthern Irish Democratic Unionist PartyWestminster
Link to something 6p4olYTs