Expect the pound to soar above predictions to $1.40, billions of pent up business investment to be unleashed to boost the economy, and the FTSE 100 to open stronger before paring back, as Boris Johnson鈥檚 Conservatives secure an impressive majority in the UK general election.
But there are many serious challenges ahead, warned the CEO of one of the world鈥檚 largest independent financial advisory organisations.
Nigel Green, chief executive and founder of deVere Group, comments: 鈥淭he pound has enjoyed its biggest surge in a decade on the hopes that a solid Conservative majority can finally end the Brexit deadlock.
鈥淢any traders were caught off guard by the size of the majority and this may push the pound even higher than previous predictions. We could see bullish traders now take it to $1.38 or maybe even as high as $1.40.鈥�
He continues: 鈥淲ith more political certainty due to the large majority, the UK economy is also likely to receive an election bounce.
鈥淏illions of pounds in business investment that has been on the sidelines due to the parliamentary paralysis聽is now ready to be unleashed. This will give a much-needed boost聽the slowing British economy.鈥�
He goes on to add: 鈥淭he UK鈥檚 FTSE 100 will open higher on Friday morning. However, this is likely to be a positive knee-jerk reaction, with some gains likely to be given up throughout the day as most FTSE companies earn聽in dollars and the pound is stronger.鈥�
The deVere CEO also offers a cautionary caveat: 鈥淚t now looks more likely that Boris Johnson will indeed be able to 鈥榞et Brexit done.鈥�
鈥淗is party鈥檚 large majority in the Commons helps him pass his Brexit deal and it gives him more political sway when negotiating the UK鈥檚 future relationship with the EU and reducing the risk of no-deal at the end of 2020.
鈥淗owever, there鈥檚 still a long way to go. Mr Johnson鈥檚 self-imposed end of December 2020 deadline is a mammoth challenge, and a no-deal Brexit is still possible on 1st Jan 2021.
He adds: 鈥淭he result election also puts a question mark over Scotland鈥檚 future in the United Kingdom.聽The SNP鈥檚 gains will embolden them in their key aim of securing Scottish independence.
鈥淢r Johnson鈥檚 monumental task to deliver Brexit with a deal and the Scotland issue will continue to fuel uncertainty in 2020.鈥�
Mr Green concludes: 鈥淏oris Johnson鈥檚 election gamble has paid off.聽 Christmas has come early for the pound, the British economy and UK financial assets.鈥�
