Donald Trump’s US election triumph caused shockwaves in the financial markets around the world.
However, in Britain things went remarkably smoothly. The FTSE 100 held up, gilt yields barely moved, and the pound gained a little on the dollar but with no particular ferocity.
Many parallels were drawn between the vote for Brexit and Trump’s election, but market reaction here in the UK was not one of them.
As Andrew Goodwin, the chief UK economist at Oxford Economics, says in a research note circulated to clients on Friday:
“The week has been dominated by the US presidential election, although the feed through of Donald Trump’s surprise victory to the UK has been much more muted than anticipated.
“Mr Trump had said that his victory would be ‘Brexit plus, plus, plus’ but in terms of the reaction of financial markets, so far it has been a case of ‘once bitten, twice shy,’ with the experience being the opposite of the chaos that followed the Brexit referendum.”
And here’s Goodwin’s chart, showing how sanguine Britain’s markets stayed during the first hours of President-elect Trump:
Goodwin then goes on to argue that the impact of Trump’s presidency in the UK — economically speaking at least — will be pretty minimal, saying:
“We think it unlikely that Trump’s victory will have much impact on the outlook for the UK because, as we argued in a Research Briefing published earlier this week, President Trump’s policy approach is unlikely to be as radical as the agenda advanced by candidate Trump. And even if he does attempt to pursue some of the more contentious policies, there is a good chance that Congress will water them down.”