By about 9am last Friday my capacity for surprise had been
almost exhausted by the Labour Party's stunning performance in
the General Election. Still, I was a bit puzzled by the phlegmatic
reaction of financial markets to the news of a hung parliament.
There was no panicky sell off as we saw last year following the
Brexit vote. The fall in the pound was a fraction of that seen last
June. The FTSE100 equity index was down over 3% on the Brexit news
a year ago; last Friday it rose 1%.
The more domestically focused FTSE250 index also ended up
slightly last Friday. Journalists, pollsters and economists may
have been shell-shocked by the result but financial markets took it
in their stride.
