The political and constitutional deadlock of the past year has finally been resolved, with the Conservative Party gaining a substantial majority at the General Election. Boris Johnson will therefore enjoy a more favourable position in the House of Commons than any Prime Minister since Tony Blair after the 2001 election.
The new Parliament will assemble on Tuesday, with the Government led by Boris Johnson now facing no parliamentary obstacles to prevent the UK’s formal departure from the EU at the end of January. But there’s still a cliff-edge to worry about, albeit one of a slightly different nature, and this will cloud the economic prospects for the UK until it is resolved.
Read the full release below which sets out our initial thoughts on the economic outlook for the UK following yesterday’s general election. This includes our new forecast for sterling, with HSBC now expecting the pound to climb to $1.45 by the end of next year (and against the euro to around to around €1.32). We have also tweaked our UK interest rate forecast, and now forecast a quarter-point cut in UK Bank Rate during next year, probably in May.