Pound to dollar exchange rate PLUMMETS as election polls predict hung parliament
- Author: Leroy Wright Jun 03, 2017,
Jun 03, 2017, 8:05
A new projection by YouGov for the Times finds that the Conservatives are set to lose twenty seats and Labour gain almost 30 seats in next week's general election in a result that would completely defy previous expectations.
Britain could be on course for a hung Parliament in nine days time, according to a new projection that suggested the Conservatives could fall 16 seats short of an overall majority.
JPMorgan analysts suggested in a research note published Friday that sterling would most likely rise in the immediate aftermath of a Corbyn victory, whereas Nomura researchers argued it was more likely investors would sell the United Kingdom currency, leading to an immediate fall. It shows the Conservatives on 42 points and Labour close behind on 39.
Kathleen Brooks, research director at City Index Direct, added: "At this late stage of the United Kingdom election campaign, the pollsters are more divided on the size of the Conservative Party's lead than at any other time during the election".
The polling figures came in stark contrast to earlier expectations that the Conservatives would increase their majority.
If Ms May fails to win an overall majority, she would be forced to strike a deal with another party to continue governing either as a coalition or a minority government.
The YouGov Poll, which was based on 50,000 interviews over the course of a week, showed May would win 310 seats, down from the 331 seats won by predecessor David Cameron in 2015.
That would have uncertain consequences for Britain's $2.5 trillion economy, and future government policy on everything from government spending and corporate taxation to bond issuance.
British Prime Minister Theresa May was fighting to shore up her general election campaign on Wednesday after a shock projection forecast a hung parliament and left the pound wobbling.
Michael Ashcroft, a former Conservative Party donor who funds polling, uses the same types of modelling as YouGov but came up with a very different estimate of the election: May winning 396 seats and Corbyn winning 180 seats.
The currency remains about 13 per cent lower against the dollar since last June's Brexit referendum but it's up for the year and rallied sharply after Ms May called for a general election. Some political experts even said the Conservative's main opposition, the Labour party, is showing "brutal" numbers.
YouGov allowed for big variations in the outcome of the election, ranging from as high as 345 seats for the Conservatives, 15 more than their current number, to as low as 274, the pollster's chief executive, Stephan Shakespeare, said.