July 05, 2024 at 05:24AM
The current tally sees them at 337 seats, surpassing the 326 seats needed for a working majority in the House of Commons. The result is as expected, with it being a landslide victory for Labour. There’s still more counting to do and they should win anything just north of 400 seats based on current projections.
Incumbent prime minister, Rishi Sunak, has come out to concede defeat and apologise for his failures. This has been the worst showing by the Tories since 1906. Absolutely catastrophic by them. The backlash has also seen Jacob Rees-Mogg lose his seat in North East Somerset. Ouch.
So, how does this impact the pound?
On paper, the result here is very much priced in already. But there’s one potential tailwind for the currency to work with.
In Europe, there’s uncertainty surrounding the French elections and what might come after, in terms of fiscal connotations. Meanwhile, in the US, the clown fiesta continues with big questions now surrounding whether or not Biden will drop out. And if so, who really can challenge Trump in his place?
In that sense, the UK has steered clear of any real political qualms whereas things are still playing out in Europe and the US.
That might make for a case for the pound to find a more solid footing if the economy holds up and if the political misgivings elsewhere continue to present more uncertainty in the months ahead.
This article was written by Justin Low at www.forexlive.com.
