What election result are global investors hoping for?

But what is the outcome the markets will be looking for?

 Clarity of direction.

For one, the position of the parties on the hottest global issue, that of trade wars. As the US and China drift apart, a multipolar world emerges out of the remnants of its unipolar predecessor. Leaders will be called upon to take the stage and declare their stance, in a way they haven’t done since the Yalta Conference.

Along with trade and supply chains, markets are also fragmenting. How will a post-Brexit Britain position itself in a world where once again a Western block becomes antagonistic against its Eastern counterpart?

Second, they will be looking for economic stability. British debt-to-GDP is near 100%, growth is low, inflation is still sticky and interest rates at the highest levels they have been in years. House prices haven’t come down significantly, so high rates are forcing many young workers to demand higher wages to keep up with interest payments, maintaining wage inflation.

The tax burden is at an 80-year peak and could rise further. With 60% of all tax receipts already going towards interest payments it is very hard for a country that hasn’t seen a primary surplus this century to stabilise debt. What will be the government’s plan towards that goal?

Third, there’s the thorny issue of Brexit. While a basic agreement on the trade of goods has been in effect for nearly four years, the environment for the trade of services, especially the financial kind, is still very much fluid.

Investors don’t expect, of course Brexit to be overturned. But they would like to see evidence of closer relationships with key trade partners, which should facilitate better trade agreements going forward.

Fourth, and final one, they will be looking for evidence of political stability. An election that is well-run, and where participants avoid descending into populism and wild accusations may be a key sign of stability going forward.

* Originally featured in George Lagarias' City Voice piece for the Evening Standard.