Coronavirus - we're here to help
From how to access your account online, scam awareness, your wellbeing and our community we're here to help.

Skip to main content
  • Register
  • Help
  • Contact us
  • Log in to HL Account

Possible outcomes of the election and what they could mean for your money

Latest predictions for the outcome of the vote tomorrow and how the different scenarios could impact your finances.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

There are now less than 24 hours until we know the outcome of this General Election.

Support for the minor parties has slumped and Labour have failed to close the gap leaving the Conservatives ahead in the polls. Nothing is certain until the votes are counted but we believe we’ll see one of three outcomes – with the outside chance of a fourth. Each scenario will have different implications for your finances as we outline below.

Conservative win

A Conservative majority is now expected by the bookies and pollsters; probably not a large one but enough to form a working government.

This is the result most likely to calm the markets, at least in part because it offers the clearest view ahead. We may see the pound rise on foreign exchange markets, depending on the extent to which this result is priced in ahead of the news.

Prime Minister Johnson would appoint his government (Sajid Javid will stay on as Chancellor, if he’s re-elected). The first priority will be to pass the Withdrawal Agreement Bill, confirming the exit process from the EU. This process will conclude by the end of 2020, with either a negotiated trade deal with the EU, or a no-deal exit.

We will get a Budget in February, setting out the government’s fiscal plans, including targeted tax cuts, such as the promised increase in the National Insurance threshold to £9,500, as well as the government’s spending plans.

The trade deal negotiation process will proceed at a gallop, if it is to be concluded by the end of 2020. It is worth remembering it will be in no one’s interests for the talks to fail. A complication is any extension to the transition period would have to be requested by 1 July 2020.

Conservatives fall just short of a majority

In theory the winning line for Boris Johnson is 323 seats; any more and he has a majority, fall short and he loses.

In reality if Johnson misses his target by a handful of seats he may attempt to press on as a minority government. In this scenario, the number of Labour seats comes into play: If Labour has also performed poorly and the smaller parties have done well, the Conservatives could limp on, hoping to do a deal on Brexit.

Timings would become more uncertain as every step will require negotiation and horse-trading. The Queen’s speech setting out a legislative programme would probably be pushed back, and all attention would be on the approaching cliff-edge of 31 January and the prospect, once again of crashing out of the EU without a deal.

Uncertainty causes nervousness and we’d expect to see increased volatility in asset prices and currency exchanges.

It is unlikely a minority Conservative government could endure for long, so this result would open the very real possibility of another General Election in 2020, as well as probable uncertainty regarding the outcome of Brexit.

Labour do well and are able to form a minority government

If the Conservatives fall well short of a majority and Labour claim around 280 seats, they would look to form a minority government drawing on support from the minor parties for the numbers necessary to pass legislation.

The first priority would be to delay the 31 January Brexit deadline, meaning a request to the EU for another extension, which we can expect them to grant, however wearily. This would be followed by Labour negotiating a new deal and then a further Brexit referendum.

On the domestic front, a Corbyn-led minority government would have to negotiate support for its legislative agenda. The manifestos and political positioning of the minor parties are more closely aligned to Labour than to the Conservatives (with whom quite possibly no one would want to do a deal); but Labour would still have their work cut out to govern effectively. They’ll have to negotiate support for controversial policies, such as the nationalisation programme and the Inclusive Ownership Fund concept. This isn’t to say these policies won’t be introduced, just that they’ll have to make concessions to get them through. The SNP would be in a great position to negotiate in this scenario. We expect another Scottish Referendum and a review of the Barnett formula (which controls the amount of public spending allocated regionally) will be at the top of their agenda.

Labour exceed expectations and win an outright majority

A Labour majority would bring some clarity on the future course of events. A delay to Brexit would be requested, pending further negotiation, followed by another referendum on whether to support Labour’s Brexit deal, or revoke article 50.

We’d expect a Budget early in the New Year, which would set the ball rolling on Labour’s radical manifesto to transform Britain.

Read more of our general election coverage

All our latest expert comment in one place.

General election 2019

HL is not expressing a view on the merits or otherwise of any of the policies or any of the political parties, and nothing in this note should be taken to be an endorsement or recommendation of any particular party, candidate or policy.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Editor's choice – our weekly email

Sign up to receive the week's top investment stories from Hargreaves Lansdown. Including:

  • Latest comment on economies and markets
  • Expert investment research
  • Financial planning tips
Sign up

Related articles

Category: Politics

US Election – an investor's guide

Who will win the US election, Biden or Trump? We take a closer look at the race for the White House and what all this could mean for investors.

Charlotte Walsh

23 Oct 2020 3 min read

Category: Politics

US election – how it works and what’s next?

The US General Election is around the corner. Here’s what investors can expect next.

George Trefgarne

14 Oct 2020 3 min read

Category: Politics

US presidential election – vice president picks and what it means for investors

As Joe Biden picks Kamala Harris as his vice president, Charlotte Walsh looks at the upcoming US election and what it means for investors.

Charlotte Walsh

19 Aug 2020 min read

Category: Investing and saving

What the chancellor's summer statement means for savers and investors

We look at what Rishi Sunak's VAT cuts and subsidies could mean for the hospitality sector, and what changes to stamp duty could do for housebuilders.

George Trefgarne

09 Jul 2020 4 min read