What will an election mean for the economy?
A currency is regarded as a share price for its economy and the decision to seek an early election is being seen as a good one.
Tuesday 18 April 2017 22:33, UK
Investors and speculators on foreign exchange markets have made their view overwhelmingly clear: an early election is a good thing for the pound.
Sterling, which had fallen sharply against both the US dollar and the euro following news that the Prime Minister was set to make a statement at 11.15am, unwound all of those losses after she called a General Election and was .
Why would the pound do that? Mainly because the market, having viewed the huge lead enjoyed by the Conservatives in the opinion polls, is assuming that Mrs May will win and secure her own personal mandate.
Soldiering on until 2020 would have made her the longest-running PM since the Second World War not to have a mandate from the electorate of their own.
Investors are also assuming that, if re-elected, Mrs May will be better placed to deliver the kind of Brexit deal she is seeking.
An increased parliamentary majority will strengthen Mrs May's hand as negotiations with the EU get under way.
An election in 2020, barely a year after the UK is scheduled to leave the EU in March 2019, could well have taken place during the middle of some kind of transitional arrangement with the EU during which there would have been much uncertainty over the future direction of the economy.
The feeling is that, under such circumstances, it is better for Mrs May to go to the country early.
Apart from the opinion polls, the PM may have been swayed by what is happening in the economy, which performed significantly better than expected in the immediate aftermath of the vote to leave the EU.
However, more recent data has pointed to a slowdown in the economy, which looks likely to have grown by 0.4% during the first three months of the year - down from the 0.7% at which it grew during the final three months of 2016.
Moreover, following the rise in inflation and continued stagnation in wages growth, consumer spending has slowed sharply.
It rose during the first three months of the year at its slowest pace for three years while retail sales, by some measures, are growing at their weakest pace since the final three months of 2008 - when the financial crisis was in full swing.
So Mrs May is likely to have concluded that her chances of securing a healthy majority will have been hurt by hesitating.
The contents of the Conservative manifesto will be watched closely by the business world. Central to this will, of course, be Mrs May's approach to the UK's trading relationship with the EU, post-Brexit, but there are plenty of other challenges still facing the country.
Chief among these is the ongoing battle to reduce the deficit which, while it is expected to fall to 2.6% of GDP during the current financial year, remains among the highest in the developed world.
Will the PM, for example, promise to retain the 'triple lock' on state pensions, which is ?
Much attention will focus on whether Mrs May will, like David Cameron in 2015, promise not to raise the rates of income tax, national insurance and VAT - a policy that is widely regarded as having tied the hands of the Chancellor, Philip Hammond, as he battles to bring down government borrowing.
Similarly, Mr Hammond's hands have also been tied by Mr Cameron's expensive promises to ring-fence spending on the NHS and overseas aid, so much attention will be on whether those are kept in place.
A further issue concerns Scotland. The Scottish National Party will do well to replicate its storming performance in 2015 and any failure to do so will be seen as reducing the risk of a - which, again, will be seen as good news for sterling.
A currency is often regarded as the equivalent of a share price for its economy. Mrs May's decision to call an early election, which she is expected to win, is being seen as good for the pound.