Sterling Falls on Election Result Fears
- Author: Leroy Wright Jun 02, 2017,
Jun 02, 2017, 5:33
British Prime Minister Theresa May dodged a reporter's question on Wednesday about whether she would resign if she lost seats in a June 8 election.
They showed Theresa May's party might lose 20 of the 330 seats it holds with Jeremy Corbyn's Labour gaining almost 30 seats.
Despite most media writing off Jeremy Corbyn and hostile press coverage, a popular Labour manifesto has helped his party close the gap with the Conservatives rather than strengthen May's majority.
Update: The pound has swung into gains against the dollar, reversing losses sparked by a poll predicting a hung parliament, as a rival survey showed the Conservatives extending their lead among voters ahead of next week's general election.
This would be a shocking result - especially as Theresa May broke the vow she made at least six times not to hold a snap election as it would not be in the nation's best interest as she said that an even bigger mandate in parliament would give her a bigger mandate in Brexit negotiations.
With only 10 days left to the United Kingdom's general elections, markets focus on politics again.
The pollster said the approach was used during the European Union referendum and consistently showed voters backed Leave.
The Survation poll was conducted on May 26 and May 27 in the aftermath of a suicide bombing which killed 22 people in Manchester last Monday and following a government U-turn on unpopular proposals to make elderly people pay more towards their care.
"The correlation has been very clear in the past month: the bigger the (expected) majority, the firmer sterling has been", said Adam Cole, head of G10 currency strategy at RBC Capital Markets in London.
"If May is unable to deliver a substantially increased majority, her ﬂexibility to negotiate will not have improved". Sterling has since recovered slightly but is still below where it was before the poll was released.
"On the inflation front we saw a slight softening in May as EU CPI fell back from 2% to 1.5%", said Hewson.
The Scottish National Party (SNP), meanwhile, is polling at four percent.
A clear win for Corbyn, whose less than two-year leadership has been marked by poor ratings, divisions among his party and a failed coup attempt, would force many investors to redraw their assumptions on both Brexit and the fiscal outlook.