Theresa May’s early election announcement wipes £46bn off FTSE 100 value

The market value of the FTSE 100 has plummeted by £46bn since the Prime Minister’s surprise announcement of a snap election in June.

While the pound fell sharply against the US dollar to around $1.2515 amid speculation about what Theresa May was set to announce, it then rose to its highest level since October 2016 (at $1.29) over the course of yesterday afternoon (April 18).

The FTSE 100, conversely, saw its biggest one-day dip since just after the EU referendum last June.

The London Stock Exchange index was already down ahead of the PM’s speech, but it ended up closing 2.5% lower than earlier in the day, wiping a total of £46bn from the value of its companies.

Sky News reported that the FTSE tends to drop as the pound rises, since a stronger sterling weakens the value of multinationals’ overseas revenue.

Neil Wilson, senior market analyst at London-based financial company ETX Capital, said: “For investors [the early election] adds another layer of complexity to an already uncertain picture for UK and European assets.

“Volatility is likely to remain elevated over the coming weeks. And as elections are so unpredictable, there is always the outside risk it could spark a reversal in the entire Brexit process.”

He added: “However, on the current polling, the likelihood is we will be left with a Government on a more secure footing that will ensure Brexit means Brexit.”