Prime Minister Rishi Sunak has called a surprise general election for 4 July.

Rumours about a summer election had been swirling around Westminster all day today.

Mr Sunak made a statement announcing the election outside No.10 just after 5pm today.

He said that his focus throughout his term had been on "economic stability" and with CPI inflation dropping today to what he called a "normal" level (2.3%) the time was right to call an election.

In a 10 minute statement he said that since the last election the country had been through huge turmoil, including the pandemic recovery, and both internal and external challenges but he said he was proud of the Conservatives' record.

Reaction from the industry was one of surprise but some have pointed out positive economic news lately.

Royal London Asset Management’s head of multi asset Trevor Greetham said: "2024 is delivering on its promise to be a big year in global politics with Rishi Sunak calling a UK General Election for 4 July, in a slightly surreal Downing Street announcement in the pouring rain against the distant strains of D:Ream’s 1997 anthem ‘Things Can Only Get Better’.

"In some ways things are getting better in the UK. We’ve just seen both the best quarter-on-quarter GDP and the lowest year-on-year inflation in almost three years. Context is everything, though. In real terms, GDP is still only 1.5% above its pre-pandemic, pre-Brexit level. Meanwhile, the price level for consumer goods is a whopping 23% higher. And while investors were at one point expecting at least six rate cuts from the Bank of England this year, inflation has been slow to fall and they now put only a 1 in 10 chance on a first rate cut in June.

"Against this backdrop, and absent major surprises, we don’t expect the UK election to be a market moving event. The opinion polls are strongly skewed towards a victory for Keir Starmer’s Labour. Moreover, macro-economic policy differences are far smaller than they were in 2019 when Boris Johnson squared up against Jeremy Corbyn. This time both parties are pledging to stick to fiscal rules and to stay outside the EU Single Market. Either party would inherit severely strained public finances, limiting their room for manoeuvre."

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “After a period of fevered anticipation, the general election has finally been called and pensions will be a key focus. The state pension will continue to grab headlines, with both Conservatives and Labour confirming their commitment to the Triple Lock in recent weeks. It’s a controversial issue that divides the generations, with well over half of the over 55s saying a pledge to continue the reform would make them more likely to vote for a party.

"However, younger voters are much less sure with only 16% saying such an expensive policy would earn a tick in the box come polling day. In fact, 10% of younger voters said they would actually be less likely to vote for a party that protected the triple lock."

"Pensions are something we all need to be in for the long haul and yet they’ve been subject to the whims of the electoral cycle. One key example is the status of the recently abolished Lifetime Allowance. Mere moments after being announced with a flourish during the 2023 Budget, Labour definitively hit back saying it would reinstate this allowance if elected. The party has since gone quiet about how and when it will do this, and the pressure will be on to release more detail."