Home Business News Finance experts predict soaring pound with a Labour majority

Finance experts predict soaring pound with a Labour majority

10th Jun 24 1:32 pm

Economists showing confidence in UK pound while market suffers jitters with right-wing parties polling well across EU and Macron calling snap election in France.

Economists predict the pound could soar in value under a Labour government and they warn the rise of right-wing control in Europe could cause jitters in Euro trading.

Investment experts at Saxo say the UK currency – already trading at an almost two-year high – is set to climb even further because of the confidence in the market caused by Keir Starmer’s likely appointment as new Prime Minister.

And they say the turmoil across Europe after EU elections last week, which sparked a snap general election in France, has created uncertainty which could see the Euro continue to plummet.

The pound is already amongst one of the world’s top performing currencies, with Saxo’s finance experts confirming a large stable majority for the Labour Party could mean further GBP resilience.

In contrast, the Euro has suffered a sharp decline overnight, to €0.84 against the pound – this puts it at a near two year low, plunging to its lowest rate since August 20th, 2022.

A Saxo spokesperson said, “GBP has held up well and focus is now turning to UK elections where a large stable majority for the Labour Party could mean further GBP resilience.

“With the Labour Party manifesto due on Thursday, market confidence is only likely to build further – despite European elections seeing big swings to the right.

“Meanwhile, while there is scope for recovery for the Euro, jitters may well continue amid Macron calling a surprise snap election, as the prospect of Le Pen in power grows.”

The pound is up to its strongest position against the euro for nearly two years (£1 = €1.18), amid shock results in the European elections overnight. GBP is showing at its highest rate since August 13th, 2022, and is firmly on the up as the nation edges closer to the polls on July 4th.

Meanwhile, the Euro could suffer jitters after French President Emmanuel Macron called a snap parliamentary election for June 30 after he received a drubbing at the hands of his far-right rival Marine Le Pen.

His German counterpart Olaf Scholz didn’t fare much better, with his Social Democrats suffering their worst performance in an EU election in history, while Prime Minister Giorgia Meloni right-wing party appeared to be the winner in Italy.

Overall, the three centrist groups – EPP, the Socialists and the liberals – will hold a comfortable majority, despite the far-right gaining seats, while the Greens suffered losses.

With European Commission President Ursula Von der Leyen’s center-right EPP grouping projected to cement its place as the biggest group in parliament, she is well placed to win a second term.

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