Update: The Pound has recovered above the day’s opening levels as the session draws to an end, although that is not taking into account the near -2% fall recorded overnight. News that Northern Ireland’s Democratic Unionist Party (DUP) may support the Conservatives in Parliament to give Theresa May a hairline majority has improved sentiment towards the Pound.
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Voting in the UK general election has closed and the long-awaited exit poll can finally be announced.
The GBP EUR exchange rate fell from above 1.15 to 1.13 – its worst rate since January 17th this year – the second the poll was announced.
Markets have not reacted positively to the survey, conducted by GfK Ipsos MORI on behalf of BBC, Sky News and ITV News, after the findings predicted that the UK would wake up on Friday morning to a hung parliament.
The survey polled 30,450 voters and found that the Conservatives were likely to have lost -17 seats, taking them down to 314; 12 short of a majority.
Labour are predicted to secure 34 more seats at 266, the SNP 34 – a loss of -22 – and the Liberal Democrats could gain six seats to claim 14 in total.
Markets Shocked as Poll Undermines Confidence of Conservative Landslide
The polls have severely shocked markets, who just a few weeks ago were buying into Sterling on the expectations of a landslide victory for the Conservative Party.
Indeed, a poll just yesterday predicted that Theresa May would secure the strongest landslide victory seen for the Tories since the days of Margaret Thatcher.
Speaking on the BBC’s live election night coverage, Professor John Curtice from Strathclyde University has claimed that, even taking into account the fact that margins of error still leaves open the possibility that the Conservatives will win enough seats to gain a majority, the data suggests Theresa May has ‘failed’ in her goal of returning to government with a stronger presence.
Officials from the Conservative Party, Labour Party and the Scottish National Party have all been keen to stress that the exit polls are, of course, just surveys and that the actual results could be significantly different.
However, the markets have been shocked by the potential for the election to be much closer than initially predicted.
Even as recently as yesterday, polls were suggesting the Tories would secure a strong lead and this had helped the Pound to make gains even as the opening of the polls drew closer.
Markets are now digesting the implications for the Brexit process of a hung parliament.
It is highly unlikely that, if the exit polls were to prove entirely accurate, a coalition could be formed that would leave the Conservatives in the minority, as this would require Labour, the Liberal Democrats, the SNP and the Green party to join forces and secure a majority of one.
However, a hung parliament still plays havoc with Theresa May’s Brexit plans, promising to heighten the already enormous levels of uncertainty surrounding the UK’s divorce from the EU.
Newcastle upon Tyne Declares First; Labour Victory
Newcastle upon Tyne has been the first to declare its results.
Conservative Party Candidate Nick Kyte secured 9,134 votes, compared to Labour Candidate’s Chi Onwurah’s 24,071 – a majority of 14,937, which represents a 2.1% swing away from the Conservatives towards Labour.
This is far below what the exit poll had predicted, with a swing of 7%, although Curtice claims the exit poll still accurately predicted the ‘direction of travel’.
Commentators are suggesting that one of the reasons why the Conservatives might not do as well as expected is because the UKIP vote doesn’t seem to have transferred to the Tories as much as might have been expected.
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