An unexpected result in the General Election has left uncertainty surrounding key policies, particularly involving personal finance.
As the UK woke up to the results of the General Election, a number of key policies were placed into uncertainty. A Conservative majority had been widely been predicted, leaving strong assumptions about what would happen to tax, pensions and the Living Wage. After the hung parliament exit poll result was announced, the pound dropped steeply against the dollar. This later stabilised but remained much lower in value throughout Thursday 9th June.
Savings rates are currently at their lowest in history, with the Bank Rate being cut in half from 0.5% to 0.25% back in August. There is also very low competition from providers meaning there is no driving factor to push rates up. This result should not do much to change these rates, and could in fact see them fall further.
Mortgage rates are also at rock bottom, and with the housing market slowing before this result, many are expecting this to continue. Nerves pre-election have resulted in a drop in new listings, and prices have been in sustained decline since 2009. Buyers can hope to enjoy an extended period of cheap mortgages, but may be subject to stricter borrowing criteria from lenders.
The Strength of The Pound
The value of the pound was already low following the EU referendum result, but dropped further on Election results day. This will likely fluctuate depending on the type of coalition that is formed, whether or not Theresa May resigns, and how Brexit negotiations develop.
Before the election, the Conservatives included plans to scrap the Triple-Lock in their manifesto. Labour pledged to keep the Triple-Lock beyond 2020, and in the event of a Labour-led coalition we could see this remain in place. Under the Conservative’s plans, the 2.5% floor would be removed, and a “double-lock” would be in place from 2020 onwards.