The pound jumped against the Euro at the highest rate in two years following the news of an imminent Conservative majority, with the financial industry pleased about the prospect of a stable right-wing government.
Most recent polls show the Conservative Party have so far secured 316 of the 326 seats needed to form a majority government, with Labour trailing with 228 seats. A BBC forecast suggests a Tory win with 329 seats.
The result comes after polls leading up to the election showed that Conservative and Labour were neck-in-neck, suggesting a coalition government would be the most likely outcome.
Paul Smith, senior economist at Markit and author of the IPA Bellwether Report, told Marketing Week: “Its likely to be a stable government, which is usually seen as a good measure for business confidence in general. The markets have reacted positively this morning.
“On that basis of stability there will be no uncertainty around horse trading around a coalition government, which will be positive for the marketing industry.”
Tim Lefroy, chief executive of the Advertising Association, agreed.
“Creating jobs at twice the rate of the rest of the economy, driving growth and fuelling the Creative Industries, advertising is at the heart of the Tory long term plan,” he said.
“We’re well placed to build on progress made during the Coalition and push advertising further up the economic agenda.”
The FTSE 100 Index has also jumped by 148 points or 2% to 7028 points, following this morning’s result.
The most recent Bellwether Report, released in April, showed that marketing spend grew at an accelerated pace in the first quarter of 2015, as marketing executives grew more optimistic about financial prospects.
More than a third (37.8%) of companies had grown more optimistic compared to 30.7% in Q4, and while this number was still down from 38.6% in 2014, the next report could show different results if the Tory’s take office.
“Questions remain over things like an EU referendum, which will cause uncertainty if they do go ahead with it,” Smith adds.
“It wouldn’t be particularly useful for business as we do so much trading with Europe. But in the short term, I think it will be positive for business in general.”