Lead-up to British election exposes uncertainty for financial sector

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What's going on?

The London stock market, the FTSE, touched record highs during UK election campaign season and doesnt seem to be negatively affected by the possibility of a hung parliament. Stocks across the Eurozone were up, helped by the European Central Banks economic stimulus programs. Such as the bond buying programs currently occurring.

What does this mean?

Banking, utilities and property sectors are especially vulnerable to political change. One economist argues that the election, in general, could produce various outcomes that negatively affect stocks from medium sized publicly traded companies -- especially affecting those companies that receive lots of support from the government and central bank. Economists expect financial stocks to suffer the most in the lead up to the May 7thelection since issues such a potential referendum on the UKs EU membership could damage the status of London as a global financial hub.

Why should I care?

If you are a resident of the UK, you will undoubtedly be affected by whatever policies the newly elected government enacts. If the UK has a referendum on leaving the EU, this would have a potentially negative effect on the financial sector, so any investments should be made prior to this vote. Overall the stock market is enjoying new highs and seems largely unaffected by the lead up to the election, which might be a good time to sell some stocks ahead of the upcoming turmoil of changing governments and new policies being enacted.
Originally posted as part of the Finimize daily email.

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