The popularity of the United Kingdom Independence Party (UKIP) is on the rise across Britain and with Mark Reckless becoming the party’s second elected Member of Parliament; few can argue that the anti-EU group is on the rise.
With anger over high unemployment, falling wages and an economic crisis with no end in sight, anti- EU political groups are on the ascendency. From the UK to the heart of the EU, anti-EU groups are gaining in strength.
With UKIP gaining more and more support, the economic markets are growing increasingly nervous that next year’s UK general election could be a very unpredictable affair. For decades, the Labour and Conservative parties have dominated British politics but that all looks set to change next year as disenchanted voters turn to alternatives like UKIP and the Green Party in England and the Scottish Nationalists (SNP) in Scotland.
UKIP By-election win softens Pound Sterling (GBP) Exchange Rate
Following Mark Reckless’s by-election victory on Friday the Pound (GBP) exchange rate weakened against the US Dollar and other peers as investors were spooked that the anti-European Union party won a second seat in Westminster. Traders now have to face the prospect that UKIP could affect UK policy towards Europe, the nation’s largest trading partner.
‘A swing toward a party which is committed to leaving Europe and which could conceivably represent the balance of power is immensely significant. It will be perceived as adding to uncertainty about the UK’s membership of the EU. If the UK were to leave the EU, our view is that would be negative for Sterling,’ said Kit Juckes, a global strategist at Societe General SA.
With UKIP’s latest victory, speculation is building that more Conservative MP’s and perhaps Labour MP’s could be considering defecting. In October, Douglas Carswell became UKIP’s first elected MP after jumping ship from the Conservatives.
The established mainstream political groups appear to be in a state of panic over UKIP’s rise as the group taps into public concerns over the UK’s membership of the EU, and the impacts of mass immigration on public services.
‘First they ignore you, then they laugh at you, then they fight you, then you win’- Mahatma Gandhi
At first, UKIP was widely ignored by the UK media but as support began to build for the group, the press and other political parties resorted to mockery, with Prime Minister David Cameron infamously branding the party and its supporters as ‘swivel eyed loons’.
However, after UKIP won the European elections earlier in 2014, (making UKIP the first party other than Labour or the Conservatives to come first in a UK wide election in over a century) tactics changed. Now, the Conservatives and even the very pro-EU Labour were forced to fight UKIP on the issues of immigration and EU membership. Some observers cite UKIP’s rise as the major reason for Cameron’s pledge to hold an in/out referendum on EU membership in the event of a Tory election victory.
With the UK general election, rapidly approaching things are sure to become very interesting in the run to May. Depending on polls released in the run up, we could see the Pound weaken if UKIP continue to increase their support.
