The UK recently held an unexpected snap general election about Brexit. This blog will tell you what it means for Brexit and UK trade going forward.

What happened?

Contrary to all expectations, the UK leader Theresa May found her position weakened by the election result. She was aiming to get a much stronger majority in the UK’s legislature. Instead her party lost its slim overall majority. It now has to rely on a coalition partner for support. May’s personal credibility has also been damaged by the election. Many commentators expect her to be replaced by a new UK leader in the next year.

The UK now has an unstable government. As a result, its policies on Brexit are more uncertain than ever. May has been a key proponent so called “Hard Brexit”, in which the UK leaves the EU’s Single Market and Customs Union. Many lawmakers think this will be disastrous for the UK economy, so pressure is building for the UK to adopt a “Soft Brexit”. In this scenario, the UK continues to trade freely with the EU, but loses the ability to strike independent trade deals with other countries and to restrict EU immigration.

What next?

Soft Brexit is more likely but by no means assured. However one thing is certain. The clock is ticking and Brexit needs to be concluded by March 2019, with or without a deal. The UK needs to decide its position soon. When it does, US investors could get clarity around how attractive the UK will be for their foreign investment.