The question of whether or not the UK elections will cause the UK economy to grow, is an interesting one, and one which we consider below. We consider the impact of previous elections on the FTSE 100 index as well as the impact of Brexit. Let’s take a look!
The previous three UK elections and their impact
The followingUK elections took place previously:
- 12 December 2019 – Conservatives
- 8 June 2017 – Conservatives elected
- 7 May 2015 – Conservatives elected
- 2010 – Conservatives and Liberal Democrats elected under coalition
- 1997 – 2010 – Labour was in power
OK… So now we know the history of who was elected previously, let’s compare this to the movements on the FTSE 100 index…:
As you can see the first time the consercatives were elected in 2015, the economy did start to grow. This continued until around June 2018 when the economy started, what I refer to as ‘stagnating’. It was moving sideways from the highest peak, until the Covid issue for a period of nearly two years. Obviously Covid’s impact was to drop the share prices like a ton of bricks! There was a sharp recovery to a point from Covid up to the time we finally left the EU via Brexit. From this point onwards, the growth in the economy has outstripped any performance previously. It seems when we are being told that Brexit has had a terrible impact on the economy, we are in fact being lied to. (I do accept that businesses have got a lot more admin to deal with, but it seems notwithtstanding this, the economy bounced back from Covid and exceeded any of its previous achievements). The economy has now reached its highest highs ever recorded!
My trading view charts do not go back far enough to consider what happened when Labour were in power. However, I found the chart below on the following website: https://www.statista.com/statistics/261764/annual-development-of-the-ftsenull-index/
According to this chart, the value of the UK economy bounced around when Labour was in power. It seemed to have two peaks where the second did not outperform the first so it was not really growing.
What will the next UK election do to the value of our economy?
Considering it’s possible for Labour to come into power, we can probably expect the economy to start stagnating again. With either the Conservatives or Labour, it seems they were both against the Brexit vote, (they seemed to have spent more time trying to ‘undo the vote’ rather than implement it, and they were both on the same page on this. Given the Brexit vote seems to have had the most dramatic effect on our Economy in a good way and these two main parties were against it from the start, indeed they were arguing there would be absolute catastrophy as a result of Brexit, it’s very difficult to say what we can expect of them or how much, what they say, can be trusted!
The writer is unclear about what will happen but we do have the history there under each party as a slight indication of their performance. It seems however, that the UK citizens actually know better than both of them!
I hope you enjoyed this article.
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