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Reaction to Tory leadership challenge

As PM Theresa May gets ready to hear her fate tonight, comments are coming into the IFA Magazine. Here’s a few of them:

Laith Khalaf, Senior Analyst, Hargreaves Lansdown: “Market reaction to the Conservative leadership challenge has been relatively muted, which suggests there is some measure of Brexit fatigue in place, and that political turmoil is largely priced in. The pound and the share prices of companies plugged into the UK economy were already under pressure, and there comes a point when yet more bad Brexit news is water off a duck’s back.

“While Brexit is clearly a big issue for the stock market, there are other issues at play too, and signs of appeasement in US-China trade relations are serving to underpin sentiment across international markets.

“Indeed, this morning, the share prices of companies the market has pinned to the Brexit mast have unexpectedly risen, including names like Lloyds and RBS – although they are still in the red across the last week as a whole.

“This goes to show that trying to forecast market movements based on the outcome of unpredictable political events is a bit like trying to play darts while riding a unicycle. Investors are therefore better served by maintaining balance in their portfolio in times of great uncertainty like these.

“We can expect markets to remain febrile while this current bout of political infighting plays out, with the pound and UK domestic companies playing the leading roles.”

Mark Dyason, Managing Director, Thistle Finance: “Wednesday’s no-confidence vote, whatever the result, has the potential to hit the property market for six.

“The Government is in a state of absolute crisis and the impact of this on the property market during 2019 is looking more ominous by the day.

“The property market is powered by confidence and positive sentiment, and right now there is very little of either.

“Homeowners, as the latest UK Finance data reveals, are on remortgaging manoeuvres as they batten down the hatches ahead of a potentially brutal storm.

“Developers are also losing confidence by the day. New housing orders fell during the latest quarter and with the way events in Westminster are unfolding they could be in freefall by early 2019.

“Brexit is generating significant caution among developers, with a growing number disinclined to put their hands in their pockets, buy sites and hire contractors against such an uncertain backdrop.

“A no-deal and chaotic Brexit is now a very real possibility, which will mire the construction and property sector in even greater uncertainty.

“For some time now, the property market has been delivering low single digit growth. With the way political events are panning out, the odds of any growth at all in 2019 are now lengthening.”

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