The Conservatives' big win in the 2019 general election provided the clarity that many people in the UK were hoping for, boosting financial markets in the process.
If there is one word that has dominated the news and debate around Brexit, UK politics and the economy in the years since the June 2016 EU referendum, it's "uncertainty".
The British public's decision to leave the European Union took a lot of people by surprise and led to more questions than answers. For most consumers and ordinary working people across the UK, the past three-and-a-half years has been a confusing and unpredictable time, regardless of whether they voted Leave or Remain.
The election result had an immediate impact on the financial markets, with stock prices and the value of the pound rising on Friday December 13th.
There are still plenty of questions to be answered, but the British public now has more clarity about the direction the country is heading in than it has had for a long time. This might mean some people who have been biding their time on big financial decisions now feel confident enough to go ahead and make some changes.
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The election effect
On the Friday after election day, the impact on the financial markets was clear for all to see. The FTSE 100 - London's benchmark stock exchange - was up by more than 2% at times and continued rising on Monday December 16th.
The value of the pound also increased off the back of the clear result, jumping by 1.6% against the US dollar and 1.3% against the euro.
So what happens now?
For ordinary working people trying to get on with their lives in the UK, there is a clearer outlook for the short-term future of the country than they've had for years.
There's little doubt that all the uncertainty connected to Brexit has impacted people's financial plans and decisions.
Many would-be property buyers and sellers have been taking a wait-and-see approach to any major moves on the housing front until there is more clarity about the UK's withdrawal from the EU. Everyday consumer spending has been affected too, according to data from the British Retail Consortium.
What it means for your money
Many people's first thoughts when a new government comes into power will be around what it all means for their money. Here are some of the key financial areas worth keeping an eye on over the next few months:
- Budget: A new Budget is expected within 100 days, meaning it's likely to arrive in February or March. This will outline government policies in areas like taxation, benefits and allowances, which will have an impact on most people's finances. The Tories' election manifesto promised no income tax, VAT or national insurance increases.
- House prices: Brexit-related uncertainty has created pent-up demand in the housing market, and there could be an increase in prices as more buyers come onto the market, particularly in London. Homeowners could also be more willing to sell, but commentators have said there could be some friction between sellers expecting a bounce in prices and buyers still looking for a bargain.
- Travel money: Political goings-on are always a factor in exchange rates, which dictate how far your money goes on holiday. A clearer political picture in the UK is likely to boost the value of the pound, as we saw in the immediate aftermath of the election. Exchange rates are constantly fluctuating, though, so it's a good idea to keep an eye on them if you're considering a trip overseas.
- Pensions: We'll have to wait until the Budget to get specific details about the government's pension plans, but it's expected that we'll see the biggest increase in the state pension since 2012. The new state pension is expected to rise from £168.60 a week to about £175.20 a week in April. The Conservatives have pledged to keep the triple-lock system, which means the state pension goes up in line with inflation, earnings or 2.5% - whichever is highest.
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