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OPINION

The Boris bounce

The Boris bounce
December 19, 2019
The Boris bounce

Perhaps it was no surprise, though, that the election delivered a Conservative victory (although I must admit to some serious pre-match nerves on election eve). But the scale of the victory – an 80-seat majority – was truly unexpected. That means that the government can get on with delivering Brexit, and that is undeniably good news for the economy and the stock market, at least in the short term. In the aftermath of the Conservative landslide, I spoke to a friend who also happens to be a regional commercial banker, who said that the lengthy uncertainty rather than the threat of Brexit itself was what has been hurting his customers, especially in industries such as construction and, because of weakening job security there, those that are dependent on consumer spending. 

No surprise, then, that when the relief rally came, the construction industry led the way, followed by those exposed to the UK consumer, from retail to restaurants. Businesses that have been hanging on for dear life, by trimming costs andselling assets, can start to invest and hire again. Such is the turn-around that the UK is now, as Chris Dillow notes on page 31, seen as the “best hope for an expansion” in 2020, as the global economy grinds to a standstill.

Indeed, while we do not yet know exactly what Boris Johnson’s new government plans, we know that he will be flourishing his cheque book with vigour. That certainty is in precious supply elsewhere in the world, which remains fraught with unusual risks, chief among them the ongoing US-China trade spat and the spread of negative yielding debt. The whims of politicians and political appointees are likely to play a huge role in portfolios in the year ahead – and there remains the possibility that the Boris bounce proves short-lived as the UK tries to reach a trade deal with the EU by the end of the year.

Against such a fascinating backdrop, we hope that the 50 pages of special features in this double Christmas issue helps you to navigate this uncertainty, and better understand the trends that could have a profound effect on the business we invest in. But as we know from our long history, that uncertainty is always there in one form or another and, as we have written thousands of times, it is sticking to tried-and-tested investment disciplines that will help you overcome it. Have a wonderful Christmas, and see you in what promises to be an exciting new year for the Investors Chronicle.