THE PROSPECT OF A CONSERVATIVE GOVERNMENT has seen the markets swell with confidence as greater certainty over a continued economic policy sets in.
The Conservatives have campaigned on a largely pro-business platform, and over the last parliament lowered the headline rate of corporation tax to 20% from 28%. That policy has chimed well with the City and big business.
The FTSE 100 gained more than 1.6% in early trading as investors absorbed UK election results suggesting David Cameron (pictured) will remain as prime minister.
Energy and banking companies led the rally – two of the sectors that had been seen as vulnerable to increased regulatory scrutiny and a higher tax burden under a Labour government.
Centrica, the owner of British Gas and one of the UK’s main energy providers, was up 7.4% to 276.5p. SSE was up 5.1% at 1644p.
Lloyds Banking Group was the best-performing financial stock, up 7% to 88p, while the Royal Bank of Scotland gained 6% at 352p.
The FTSE 250 rose even more steeply 492.06 points on yesterday, while the pound’s strength rose almost 2% to $1.54 against the dollar as the results came in, before falling back slightly.