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| Election 2017: Investors unnerved by economic uncertainty | Election 2017: Investors unnerved by economic uncertainty |
| (35 minutes later) | |
| Fears that political uncertainty will hurt consumer spending have hit shares in UK retailers and housebuilders. | Fears that political uncertainty will hurt consumer spending have hit shares in UK retailers and housebuilders. |
| The prospect of a hung parliament and speculation about the election result's impact on Brexit saw the value of sterling slide against the dollar. | The prospect of a hung parliament and speculation about the election result's impact on Brexit saw the value of sterling slide against the dollar. |
| Although the FTSE 100 edged higher - boosted by companies that earn profits in dollars - domestic stocks like Next and Barratt Developments were hit hard. | Although the FTSE 100 edged higher - boosted by companies that earn profits in dollars - domestic stocks like Next and Barratt Developments were hit hard. |
| "Disposable incomes will be stretched," said analyst Nicholas Hyett | "Disposable incomes will be stretched," said analyst Nicholas Hyett |
| In afternoon trade, sterling was down 1.7% against the dollar at $1.227. | In afternoon trade, sterling was down 1.7% against the dollar at $1.227. |
| Against the euro, the pound was down 1.4% at 1.1393.6. This makes imported goods' prices higher and squeezes consumers' ability to spend. | |
| Mr Hyett, from Hargreaves Lansdown, ran through the affected sectors: "Housebuilders are down across the board, but they're joined by restaurants, high street banks, fashion retailers and media outlets. | Mr Hyett, from Hargreaves Lansdown, ran through the affected sectors: "Housebuilders are down across the board, but they're joined by restaurants, high street banks, fashion retailers and media outlets. |
| "The implication is clear, consumer's disposable incomes are expected to be stretched, and big ticket items, like property upgrades, as well as little luxuries." | "The implication is clear, consumer's disposable incomes are expected to be stretched, and big ticket items, like property upgrades, as well as little luxuries." |
| Housebuilders, including Taylor Wimpey and Persimmon, saw falls of up to 5%, while retail companies' shares also fell. Next and Marks and Spencer fell more than 3%. | Housebuilders, including Taylor Wimpey and Persimmon, saw falls of up to 5%, while retail companies' shares also fell. Next and Marks and Spencer fell more than 3%. |
| Banks most dependant on the UK, including Lloyds and RBS, were also down about 3%. | Banks most dependant on the UK, including Lloyds and RBS, were also down about 3%. |
| However, shares overall were higher with the benchmark FTSE 100 index up 0.8% at 7,506.52. | However, shares overall were higher with the benchmark FTSE 100 index up 0.8% at 7,506.52. |
| A fall in the value of the pound tends to boost the FTSE 100 as the majority of companies in the index have significant operations overseas. A weaker pound means profits earned abroad are worth more when converted back into sterling. | A fall in the value of the pound tends to boost the FTSE 100 as the majority of companies in the index have significant operations overseas. A weaker pound means profits earned abroad are worth more when converted back into sterling. |
| International giants such as GlaxoSmithKline and Diageo, as well as mining company shares, were among the strongest risers. | International giants such as GlaxoSmithKline and Diageo, as well as mining company shares, were among the strongest risers. |
| Traders had been expecting a clear victory for Theresa May's Conservative Party. It is still the largest party but will be short of the numbers needed to be fully in charge. | Traders had been expecting a clear victory for Theresa May's Conservative Party. It is still the largest party but will be short of the numbers needed to be fully in charge. |
| Investor sentiment was not helped by the latest UK industrial production figures, which showed output rose by less than had been expected. | Investor sentiment was not helped by the latest UK industrial production figures, which showed output rose by less than had been expected. |
| While the pound's move is significant, it is far less striking than that seen in the aftermath of the Brexit vote last June, when it plunged more than 10%. | While the pound's move is significant, it is far less striking than that seen in the aftermath of the Brexit vote last June, when it plunged more than 10%. |
| Some analysts say that might reflect the diminishing prospect of a "hard" Brexit. | Some analysts say that might reflect the diminishing prospect of a "hard" Brexit. |
| Former Business Secretary Sir Vince Cable said "the whole Brexit approach will have to be rethought". | Former Business Secretary Sir Vince Cable said "the whole Brexit approach will have to be rethought". |
| Sir Vince is returning to the Commons after regaining the seat of Twickenham in southwest London for the Liberal Democrats. | Sir Vince is returning to the Commons after regaining the seat of Twickenham in southwest London for the Liberal Democrats. |
| Domestically, some commentators are suggesting that the Conservative government's long-running austerity programme, which has seen public spending constrained in a bid to cut UK debt, may be over. | Domestically, some commentators are suggesting that the Conservative government's long-running austerity programme, which has seen public spending constrained in a bid to cut UK debt, may be over. |
| But Jim Leaviss, from M&G Investments, said: "There may be less austerity and fiscal tightening in future under a weakened Conservative Party, but there will be no significant rise in gilt issuance [government IOUs] and the goal of reducing the UK's debt/GDP over the next few years is likely to remain in place." | But Jim Leaviss, from M&G Investments, said: "There may be less austerity and fiscal tightening in future under a weakened Conservative Party, but there will be no significant rise in gilt issuance [government IOUs] and the goal of reducing the UK's debt/GDP over the next few years is likely to remain in place." |