London stock markets were higher this morning as the first December general election in living memory drew closer.
But sterling headed lower against both the dollar and the euro, perhaps reflecting the fact that this is the most unpredictable election of recent times.
Later today MPs will elect a new Speaker of the House of Commons, one of the last significant acts before Parliament is dissolved.
First winter election since 1974
Outgoing Speaker John Bercow has been a controversial figure, accused of adapting parliamentary procedure to favour the cause of those who want to reverse the 2016 referendum result on leaving the European Union.
Britain is due to vote on December 12, an unusual piece of timing given that elections are usually held in the spring or early summer to avoid clashing with holidays and exam time, and many polling stations are sited on school premises. But Parliament’s failure to support the Brexit agreement struck by Prime Minister Boris Johnson has made a ballot inevitable.
This morning, the blue-chip FTSE 100 index was up 0.76% at 7,357.74 while the FTSE 250, more reflective of the domestic British economy, was 0.35% higher at 20,228.62. This was part of a broader European trend, with share prices higher in Amsterdam, Paris, Frankfurt and Madrid.
Trade UK 100 - UK100 CFD
Britain’s last winter election was held at another period of crisis, February 1974, when a miners’ strike and global energy crisis led to power cuts and the Government had put Britain on a three-day week to conserve power.
“Taxes will have to rise”
In another echo of those times, a think tank has reported that regardless of who wins on December 12, public expenditure is heading back to Seventies levels as a share of the economy. The Resolution Foundation, which explores issues connected with people on low or average incomes, has reported that maintaining current spending plans would see public spending climb to 41.3 per cent of gross domestic product (GDP) by 2023-24, only slightly below the average of 42 per cent seen between 1966 and 1984 and well above the 37.4 per cent average seen between 1987 and 2007.
Were the Tories to increase spending, the foundation said, the total would be well above the levels of the Seventies. It estimated the Labour Party’s plans would take the share to 43.4 per cent by 2023-24.
Matt Whittaker, deputy chief executive of the Resolution Foundation, said: "After an unprecedented decade of austerity, both main parties are gearing up to turn the spending taps back on.
"Whichever party wins is going to face huge questions about how they are going to pay for Britain's growing state. The fact is that whatever promises are made over the course of this election campaign, taxes are going to have to rise over the coming decade."