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GE2017: Exit poll points to hung parliament and the pound plummets

by LLB Reporter
9th Jun 17 12:00 am

What next?

Thursday evening saw the pound plummet after the shock exit poll as the Theresa May is short of an overall majority and it is pointing to a hung parliament.

The pound plummeted instantly to 1.7 per cent and down by $1.2730 after the shock poll.

Senior economist at ING, James Knightly said: “Given Labour’s left-wing tax and spend manifesto and desire to nationalise the utility, rail and mail industries, markets are not going to react well if this is the outcome.”

“The fear of higher deficits and national debt is leading to a spike in government bond yields.”

“Meanwhile the greater chance of a Scottish Independence referendum in the next couple of years (Labour may have to offer this to get the support of the SNP) will intensify political uncertainty and it is already weighing heavily on the pound.”

Economist, Samuel Tombs at Pantheon said: “Even if the Conservatives squeak home with a small majority, we see no reason why sterling should trade above its pre-election announcement level of $1.26.” 

“With Brexit negotiations expected to begin formally on 19 June, markets rightly will be worried that hardline eurospectics will retain leverage over the Prime Minister’s negotiating hand, increasing the risk of a very hard Brexit.”

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