Category Archives: UK 2017 Election

YouGov poll nine days before election predicts hung parliament

The survey of voters, commissioned by the Times, predicts that the Conservatives could fall short of winning an overall majority of seats on June 8.

In contrast to signs from a string of opinion polls that have suggested May’s Conservatives will increase their majority, the new constituency-by-constituency modelling by YouGov showed it might lose 20 of the 330 seats it holds and the opposition Labour Party could gain nearly 30 seats, The Times said.

The result has sent Sterling in a steep decline. In 2010, when the Liberal Democrats held the balance of power, markets also reacted to the uncertainty by selling sterling. This time round the choice is likely to be even less clear, with the Liberal Democrats greatly reduced in number and the pro-EU Scottish National Party likely to have more influence.

The Conservative ‘hard’ position on Brexit and, to a lesser extent other domestic issues like austerity, makes it unlikely that it could find a willing coalition partner in those circumstances, making a Labour-led government the most likely outcome from a hung parliament.

J.P. Morgan analyst Paul Meggyesi said that contrary to the 2010 experience, and despite this uncertainty, such an outcome could well see sterling rise: “A hung parliament would in more normal circumstances be viewed as quite a negative for sterling. But in the post-referendum world, all political developments need to be viewed through a Brexit prism and an argument can be made that a hung parliament which delivered or held out the prospect of a softer-Brexit coalition of the left-of-center parties … might actually be GBP positive.”

The sharp drop in Sterling today is probably a buying opportunity.