UK election on June 8 aims to put Brexit fears to rest
British Prime Minister Theresa May has the backing of the Labour Party to hold a snap election on June 8.
The surprise announcement requires a 60% majority of the 650 MPs in the House of Commons under the Fixed Term Parliament Act, which established five-year terms.
This was passed in 2011 to help stabilise a rare coalition government from 2010-15 under the former prime minister, David Cameron, who resigned after the Brexit referendum. The next UK general election wasn't scheduled for another three years.
Mrs May says she changed her mind about an election to give her government more leeway in the Brexit negotiations with the European Union.
She cites opposition from the Labour, Liberal Democrat and Scottish National parties as causing “damaging uncertainty and instability” in bringing Brexit to a successful conclusion.
Mrs May has a majority of 17 seats in the House of Commons and this makes her vulnerable to defeat on major issues if rebel Conservatives side with the opposition.
Chances of victory
The public opinion polls show the Conservatives are likely to gain up to 50 more MPs, mainly due to the weakness of the Labour Party.
Mrs May says an election will root out opposition to Brexit in Parliament and strengthen her hand in negotiations with the EU.
The SNP, with 54 seats, has all but two of Scotland’s members of the Commons and is strongly opposed to Brexit. The Lib-Dems are also strongly anti-Brexit and have just nine.
That leaves Labour, with 229 members, as the most vulnerable, as its voters were also among the biggest supporters of Brexit at last year’s referendum.
The biggest risk to a substantial win for Mrs May is whether public opposition to Brexit has risen since the referendum.
Economy remains resilient
So far, that is hard to detect, as the economy remains resilient, though this is before the EU negotiations even start.
The financial market reaction to the election news was initially positive for sterling, which rose 1.5% to $US1.275 – the highest since December.
Mrs May says the UK’s economic strength has “exceeded all expectations” since Brexit with one of the fastest growth rates at 1.8% in the G7 advanced economies in 2016.
But this resilience may soon begin to fade, as quickening inflation from a weakened pound eats into households’ spending power and uncertainty over the UK’s future ties to the EU stunts business investment.
The IMF has raised its forecast for UK.growth this year to 2%, reflecting its stronger than expected performance, but it still expects Brexit to bear down on growth in the longer run.