Could the outcome of the election cause big gains or losses for the British Pound…

It is Thursday, 4th July, and the people of the UK get to head to their local polling station to vote in a general election for the first time since December 2019, when a snap election was called to help assist the Tory government gain the majority needed at the time to push Brexit through their negotiations with the EU. The focus then was very much on which party could deliver Brexit best. Things have very much changed since, with the cost of living impacting the lives of pretty much every household and business in the UK following a four-year period where we have lived through a pandemic and the consequences of the Ukraine and Russia conflict highly inflating global energy prices.

What we’ve seen so far, and what happened in 2016

So far on polling day, the currency market hasn’t seen any volatility ahead of a potential new government leading the country from Friday morning. All polling data suggests the Labour Party is on course for a comfortable majority win, potentially the biggest majority ever seen. So these projections are likely factored into the markets, which has kept GBP very stable so far on voting day. If after the votes are counted and results differ significantly from the polling predictions, we could easily see some big moves in the pound’s value against the euro, US dollar, and other currencies. In 2016, when the UK voted to leave the EU against expectations of a remain majority win, pound sterling value crashed against every currency, and eight years on the pound has still not recovered from those post referendum vote losses.

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1.1819* 🔺GBPEUR – 1.2767*🔺GBPUSD

*indicative rates only, contact us for a live rate