Why is the UK holding a general election?

When is the next UK general election?
Prime minister Theresa May has called an election for June 8, 2017.

When was the last general election?
May 7, 2015.

Why has Theresa May called a fresh election so early?
Mrs May, who became prime minister last July following David Cameron’s resignation, had previously said that the next general election would be in 2020.

But an early election, with a healthy lead in the polls, should give her a larger majority in the House of Commons and a stronger mandate through the difficult negotiations as the UK leaves the European Union.

The prime minister said as she announced the vote that “division in Westminster will risk our ability to make a success of Brexit”.

Ultimately, the prime minister is understood to have made the final decision on advice from senior Conservative figures to take advantage of an average 18-point lead in the most recent polls that the Conservatives have over Labour.

What is the UK’s Fixed-term Parliaments Act and does it matter?
The coalition government between 2010 and 2015 introduced a fixed-term parliament act in 2011, requiring five-year terms. But a prime minister can trigger an earlier election if two-thirds of MPs agree.

Cross-party support in this instance looks likely: both Jeremy Corbyn, Labour leader, and Tim Farron, leader of the Liberal Democrats, have said they welcome the decision. Scottish National party leader Nicola Sturgeon has called the move “a huge political miscalculation by the prime minister” and has vowed the SNP will fight hard in the contest.

The Commons vote will take place on Wednesday. But should Mrs May fail to secure the two-thirds needed there is still another, albeit highly unconventional option for an early general election: Tory MPs could support a vote of no-confidence in their own government.

What happened last time around?
Led by then-prime minister David Cameron, the Conservatives won an unexpected election victory gaining their first outright majority in parliament in more than two decades. The election was also a triumph for the SNP which won 56 of Scotland’s 59 parliamentary seats.

In contrast, Labour and the Liberal Democrats both lost heavily. The Lib Dems took only eight seats, down from the 57 they won in the previous 2010 election. Labour, hit hard by losses in Scotland, went from 258 to 232 seats.

What will happen this time? What are the odds?
The consensus is that Mrs May and the Conservatives are set to capitalise on their lead in the polls, especially given divisions in the Labour party. Bookmaker William Hill says the Conservatives have an 84 per cent chance of winning with an overall majority.

However there is a chance that the Lib Dems could rebound in the south-west and in Remain-supporting areas, and that the SNP could also shore up support. This would in turn give it a stronger mandate for a second independence referendum which it wants to take place by mid-2019.

What has been the reaction from sterling?

The pound initially weakened after Downing Street announced Mrs May would make an unscheduled announcement on Tuesday, but then climbed to a five-month high of $1.2766.

What does it mean for Brexit?
The reaction in the currency market suggests investors are betting that in the event of a May victory, the prime minister will have a firmer hand when it comes to negotiating a soft Brexit in the face of hardline Tory Eurosceptics.

There is theoretically a risk that a snap election could delay Brexit negotiations but this seems small. Little progress had been expected until after the French presidential and German federal elections had both taken place, the latter of which takes place in September. Donald Tusk, president of the European Council, sounded positive, saying on Twitter he had had a “good phone call” with Mrs May on the upcoming election.