The 2017 General Election ends in a hung parliament – What now?

9th June 2017

Britain today woke to the shock news that none of the major political parties have won enough seats to rule as a majority party. With a hung parliament confirmed, the onus now lies on Theresa May and the Conservative Party to decide what this election result will mean for the future of Britain.

What is a hung parliament?

A hung parliament means no party has won enough seats in a general election to have a majority in the House of Commons. The Conservatives are projected to end with 318 seats, falling eight seats short of the 326 required to form a majority government.

What now?

When the House of Commons sits on 13 June, there are a number of potential outcomes:

  • The most likely is that Theresa May forms a Conservative-led coalition government with the Democratic Unionist Party – having spoken to the Queen today, Mrs May has already signalled her intent to pursue this option as a priority

Should this fail to materialise, the other potential outcomes include:

  • Theresa May forms a Conservative minority government, but in doing so risks the ability of the Conservative Party to pass new legislation
  • Theresa May resigns and Jeremy Corbyn forms a Labour-led coalition government
  • If no party is able to form a government, another General Election is called for this summer

Ultimately, with Brexit negotiations scheduled to commence on 19 June, the responsibility lies on the government to provide the clarity, leadership and stability to ensure the country can move forward.

Investors, business and consumers to maintain momentum

In what has been a year of momentous political shocks, the UK’s investors, business leaders and consumers have proven resilient in their support of the private sector, helping to ensure the economy’s forward momentum is not lost; on Sunday, the World Bank upgraded its economic growth forecasts for the UK economy from 1.2% to 1.7%. It is now vital that the next government – in whatever form it takes – deliver clear direction and swift action to maintain the private sector’s positive progression.

Next week, when it becomes clear what the next government will look like, IW Capital will conduct exclusive research into UK investors’ sentiment towards the new government. In particular, this future-facing study will delve into how much confidence investors have in the ruling politicians’ ability to support SME growth and to protect the interests of the private investor community.