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Investors cautious in the shadow of London attacks

Monday, June 05, 2017 - 01:39

Sterling drops but then pares losses as markets react to the weekend attacks in London that left seven people dead. With security a major issue ahead of Thursday's national election, markets are braced for an edgy week of trading and, as Ciara Lee reports, the economy hasn't gone away as a concern either.

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Londoners get back to work after Saturday's van and knife attack left seven dead. Security now at the forefront of campaigns ahead of Thursday's general election. Investors reacted to the latest attack, with sterling to falling half a cent against the dollar, although it quickly recovered ground. (SOUNDBITE) (English) IG MARKET ANALYST, CHRIS BEAUCHAMP, SAYING: "I think it's a reflection of previous events, previous tragedies in Europe. Certainly you have a very very short term impact. The fact that this one took place on Saturday night means you've got a Sunday to digest the news. The impact starts really to sort of fade quite quickly. And as ever, politics is still the most important thing. Clearly it is playing into the polling and how the perceptions of leaders are being affected. But really the market shifting back again to what might happen on Thursday and Friday" Polls predict widely varying results. Some say it could be close, possibly throwing Britain into political deadlock just days before formal Brexit talks are due to begin, and creating market volatility. The latest YouGov poll shows Theresa May's Conservatives could be 21 seats short of a 326-seat majority (SOUNDBITE) (English) IG MARKET ANALYST, CHRIS BEAUCHAMP, SAYING: "I think it's a classic case of we swore off polls last year and said we never trust them again and then we began to trust them again over the last few weeks. And suddenly the Conservative leader's dropped off a cliff." And there are warning signs about the economy too. Britain's services grew slower than expected last month as businesses put off investment decisions ahead of the election. And higher inflation is also squeezing households. The weak performance increases the risks that quarterly growth in the overall economy might not hit its forecast of 0.5 percent.

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Investors cautious in the shadow of London attacks

Monday, June 05, 2017 - 01:39