UK election: Tory victory is likely but hung parliament could persist
UK election: Tory victory is likely but hung parliament could persist
  • Deal with Tory majority, referendum with Labour win, but hard to guess with Tory minority
  • Opinion polls suggest a Tory victory, but they should be taken with a grain of salt
  • Tactical votes - another complicating factor but probably few in number

On December 12 the UK goes to the polling stations. The rest of the world sees the election as a vote on Brexit, where the UK’s departure will be determined, but domestic issues are also top of mind.

Our baseline scenario is that the Conservatives (Tories) become the largest party and are given the first chance to form a government. The key question is whether they get their own weak majority (de facto 320 seats needed), which would mean that Boris Johnson’s deal goes through, or whether we again get a hung parliament (no party with its own majority). The likelihood that the Tories form a coalition or a minority government is small. In such a scenario, a new EU referendum, a softer Brexit or approval of Boris Johnson’s deal – against all odds – are all possible outcome. If Johnson’s deal is approved, the focus would shift to the detailed trade talks, but the risk is that the trade negotiating period will be very short, and we are then quickly back to a time of uncertainty for businesses. The initial market reaction to a Tory victory would nonetheless be a stronger pound.

PDF-Document Read the full analysis/report here


Cathrine Danin, +46 8 700 92 97, cathrine.danin@swedbank.se

Greta Ilekytė, +370 5258 22 75, greta.ilekyte@swedbank.lt.

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