How Brexit and the minority government pose a problem for international investors
Three factors continue to cause political instability in the UK.
The first and most important is that Britain is being run by a minority government, reliant upon ten Democratic Unionist Party MPs for a majority in the House of Commons (a majority secured only because Sinn Fein’s seven MPs do not take their seats.)
The second factor is Brexit. In responding to the vote of the British people to leave the EU, the British political class has proved to be unimaginative, inflexible and oblivious. The collective failure to respond to the mass disaffection which the referendum revealed has deepened public distrust in established governmental institutions, such as the civil service and the Bank of England, as well as political parties.
The new Brexit Party stands at the top of polls for the European elections, and should it put up candidates in a future general election it will likely split the Conservative vote more than Labour’s, making the prospect of a hard left government more likely. This is the third factor causing instability in British politics.