Stock market tumbles as the pound surges – and the chaos is just getting started as May calls an election

Malcolm Rifkind has predicted a thumping victory for the PM, but recent events have made clear that the only thing you can count on is that you can’t count on anything. And the markets know that

James Moore
Chief Business Commentator
Tuesday 18 April 2017 16:35 BST
Theresa May has performed a volte face and called an election, scaring the stock market
Theresa May has performed a volte face and called an election, scaring the stock market (Getty Images)

The pound soared but the stock market slumped. Something for everyone, then, in the financial markets’ reaction to Theresa May going for a stroll and deciding to go back on everything she has previously said.

Talk about creating uncertainty. You can expect more of it, and more of the volatility that goes with it, in the weeks to come.

Tory grandee Malcolm Rifkind might think Ms May is nailed on to deliver the sort of kicking to Jeremy Corbyn that Margaret Thatcher once delivered to Michael Foot but he clearly doesn’t get out much.

The only thing you can count on with any certainty in the world in which we currently live is that you can’t count on anything with any certainty. It really is that simple

Currency traders, however, think that Mr Rifkind is right, and that Ms May will be returned with a thumping majority.

That would give her a mandate for her idea of Brexit, potentially helping her to face down not just Remainers but also (and this is what the City and the business community is hoping) the lunatics in her own party who fantasise about Britain sailing off into the North Sea without a deal.

Let’s vote for a new royal yacht, sign the bill on vellum, equip it with a few guns, and point them at Johnny Forrenur if he refuses to do what we bally well tell him to when we want to trade!

What should scare the markets is that there might be a lot more of that on the Tory benches in the next Parliament. Ms May has shown scant sign of being willing to take on the right wingers in her own party and the baying mob of the Brexit-backing press to date.

If you want to know who poses the greatest threat to the national interest, the economic interest, and the markets’ interest, it’s the Ukip tendency in the Conservative Party, not the Remainers in Parliament, who are only doing their democratic duty in fighting for the rights of those of us who cast our votes against madness in the EU referendum.

The sail-off-into-the sea brigade would wreck the British economy, and make life impossible for British business. And it knows it.

The currency traders are crossing their fingers and hoping a big May majority will allow her to get her way. And that it will be a (semi) sensible way. They also hope that this will mean their lobby groups get listened to.

There is going to be a lot more uncertainty to come in the weeks ahead.

A long campaign, the potential for any number of banana skins, and events, dear boy, and dear girl, events. Lots of them. The stock market is right to be nervous. If you’ve any money, you’d be best off sticking it under the bed for the next couple of months.

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