UK Music and the Creative Industries Federation have called for the music industry to be put at the forefront of policy as the UK reevaluates its place in the world
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Professionals from across the UK live industry are awaiting the results of today’s general election, as FinTech firm Centtrip predicts sterling fluctuation of up to 10%
By Anna Grace on 12 Dec 2019
As millions across the UK post their vote in today’s (12 December) general election, financial technology firm Centtrip, which works with over 500 clients in the music industry, has predicted how currency markets may react to different electoral outcomes.
The election, which is being dubbed the “most important poll in a generation” by some commentators, is the third of its kind in less than five years.
According to Centtrip, the pound sterling could fluctuate by as much as 10% depending on the outcome of the vote, as the possibility of a hung parliament looms large and the continuation of Brexit uncertainty rumbles on.
Professionals across the UK industry should closely monitor the vote, say Centtrip, to determine how to mitigate risks to live events in the case of a currency swing, as volatility in foreign exchange markets can have a significant impact on the live industry, affecting touring income, royalty payments and festivals, among other areas.
The FinTech company predicts the election has three likely outcomes:
1. A Tory win of an outright majority will give political autonomy and is likely to end the Brexit deadlock, which will strengthen sterling. However, a Tory win has already been priced in by traders, seeing sterling rally four cents against the dollar over the course of the campaign. If Boris Johnson fails to capitalise on his poll lead and ends up with a smaller-than-forecast majority, the pound will give up its recent gains.
2. While a Labour win is a long shot according to the polls, it should not be discounted. Pollsters have got it wrong before. However, businesses have serious concerns about a Jeremy Corbyn premiership, which could lead to a rapid withdrawal of investment from the UK and a potential run on the pound.
“The music industry needs to think carefully about how it mitigates risk moving forward”
3. However big the gap is between the Conservative and Labour parties, the UK could still end up with another hung Parliament. This will mean a number of things, including no working majority, continued political paralysis, further extensions to Brexit and, inevitably, a weaker pound.
“We have studied the three likely outcomes of the election and our clients are making decisions based on that analysis,” comments Freddy Greenish head of music, film and entertainment at Centtrip.
“This is a historic election, which will have a major impact on the currency markets whichever way people vote and therefore the music industry needs to think carefully about how it mitigates risk moving forward.”
Centtrip predicts that, in the event of a majority Conservative government, focus will shift to the 11-month window of opportunity for the UK to sign new trade deals with the European Union, with the aim of pushing through the withdrawal agreement by 31 January 2020.
The uncertainty surrounding the Brexit deal – and the negative impact leaving the EU is likely to have on the music business – has been one of the main concerns for the UK live industry, with figures including former UK Music CEO Michael Dugher raising the alarm over the potential impact on touring and academics highlighting the risk to festivals, production companies, venues and other parts of the UK live music ecosystem.
The results of the election are expected in the early hours of Friday morning.
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