Britain's election
The exit polls
What does a weak Theresa May mean for Brexit?
by C.W.
WHEN the exit poll was released, showing that the Conservatives were short of an overall majority, the pound slumped. For weeks traders have been guided by a simple maxim: the bigger Theresa May's majority, the better. The argument goes as follows.
With the Conservatives' small majority after the election of 2015, Mrs May (who, remember, supported Remain in the referendum) was reliant on ultra-Brexiteers in her party (Jacob Rees-Mogg, Dominic Raab and the like) to get things done. If she did something they did not like in the upcoming negotiations, they would cause her trouble. With a big majority, however, the influence of the headbangers would be diluted by a flood of new MPs to the Tory benches.
Now that it looks as though she has, at best, a small majority, the traders' case no longer looks so optimistic. So many of them are selling their sterling investments. They see a harder Brexit on the cards.
However, other commentators (both Leavers and Remainers) say that a hung parliament in fact points towards a softer Brexit. If Mrs May is reliant on votes from another party, for instance, she may have to compromise on part of her plans (say, to leave the single market and the customs union). The vote itself may also be interpreted as a protest against the Conservatives' Brexit plans. Right now everyone is looking at the anti-Brexit Liberal Democrats, who could in theory be kingmakers in the new parliament (though they said again this evening that they will not join a coalition).
Which side is right? Some accused the traders of being naive about what Mrs May would do if she had a thumping majority. Would she really want to compromise with the EU, or would she feel emboldened for the hardest possible Brexit? For arch-Remainers, their best hope may well lie in a "coalition of chaos". With everything to play for, no one knows what sorts of deals may be struck.
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Speakers' Corner signs off
How the Tories lost
Anatomy of a doomed campaign
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Election night offers little cheer for the Liberal Democrats
How a minority government does (not) work
The hung parliament and Brexit
Economists cannot decide whether a hung parliament is good or bad
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