Sanguine markets ignore UK election risks but sentiment still highly fraught

IN the past few days, both the British pound and UK stock market have held firm, and indeed are close to recent heights.

Price trends indicate that market participants are sanguine, believing that Britain will continue to have a business-friendly government. After all, a confident Prime Minister Boris Johnson called an election with an eye on gaining a workable majority. His hope is to achieve business and financial certainty by pushing Brexit over the line.

Market traders and investors are betting that the Conservative Party will achieve victory as it is well ahead in the polls. One poll places the lead as high as 16 percentage points over Labour, the main opposition party. A more recent Telegraph poll, however, cuts the lead to eight points. Such polls indicate that on the face of it, Mr Johnson will easily defeat Jeremy Corbyn, Labour's hard-left leader, which would be good for the markets. Mr Corbyn favours steep increases in taxation, nationalisation of utilities, rent controls and other property restrictions.