“Strong and stable”. That was the message put out by the governing Conservative party consistently throughout an election campaign that few, even within its own party, thought was necessary in the first place.
As Thursday night turned into Friday morning, though, it was clear that the mandate sought by UK Prime Minister Theresa May on the eve of Brexit negotiations was going to prove as elusive as predicting the behaviour of the British electorate.
With a hung parliament confirmed in the early hours, the currency markets reacted in the same way they have since the EU referendum last June, with sterling plunging against both the dollar and the euro.
The stock market also reacted in familiar fashion, with the FTSE 100, made up mainly of companies who earn in foreign currency, rising as a result of an election.
Procurement, perhaps more than any other business function, needs certainty to thrive. And the result of Thursday’s vote has not provided that.
Speaking to Procurement Leaders, one CPO said that the vote had the potential to cause chaos in both the short and long term.
“We’re right back in trouble,” they said, on condition of anonymity.
“I think everyone in the procurement community, both in the UK and in Europe, hoped that the election was going to offer some stability going into Brexit negotiations. It’s worrying that they will now begin with the whole of the UK, and to a certain extent Europe, in limbo.
“It feels the same as things did after the referendum. This was the last thing procurement needed if I’m being entirely honest.”
Hopes of a softer Brexit stance, in which the UK possibly stays in the Single Market and or Customs Union, will perhaps be higher.
In reality, though, the uncertainty is likely to cause even greater angst for the UK economy.
“Brexit talks are now likely to be even more unsettling for markets, and the prospect of another election raises the risk of a delay, potentially leaving the UK without a negotiated exit settlement,” said Mark Haefele of UBS Wealth Management’s chief investment office.
“Although we believe the pound had already priced in much of the ‘hard Brexit’ risk before this vote, the currency will continue to experience volatility through the governmental and Brexit talks.”
The fallout of this election result is, though, in keeping with the mood of the day, shrouded by a sense of mystery.
“The strong Brexit mandate has not been achieved, which you could argue is slightly negative for sterling in some ways, because if we’re going to go ahead with Brexit you want to have a strong negotiating hand,” says Ian Gunner, Altana currency fund manager.
“But the flip side of that is that maybe a hard Brexit is less of an option and we go to a soft Brexit, which is sterling supportive. So there’s a lot of uncertainty, but the downside for sterling in this is not completely obvious."
This article is a piece of independent journalism, written by an experienced journalist and commissioned exclusively by Procurement Leaders.