2019 UK General Election
Britain’s electorate will go to the polls on Thursday the 12th of December 2019, with expectations that the results of the general election will pave the way towards the end of 3 ½ year-long Brexit story.
UK Prime Minister Boris Johnson promised that he would complete the divorce process even before the 31st of January 2020 deadline if he wins the majority that would allow him to pass the Brexit plan through the parliament.
On the other side, his opponent, Labour Party leader Jeremy Corbyn is promising another referendum on UK’s membership in the European Union, in case of their victory.
Completely opposite views of handling Brexit, which is the main theme of the whole story, mark the 2019 election highly unpredictable with the outcome expected to trigger a strong market reaction.
Recent polls showed a strong lead of Conservative Party, which pushed sterling to new multi-month highs and deflated FTSE100 index, but the latest reports signaled that the lead is narrowing as election day nears, increasing the uncertainty.
The latest predictions show expectations that Conservatives would win 337 seats in the 650-seat parliament, in comparison to the previous forecast for 366 seats; Labour is expected to win 235 seats; Scottish National Party 41 and Liberal Democrats 14 seats.
Sterling advanced nearly 3% against the dollar in the past couple of weeks, adding to 9% recovery rally from 2019 low, posted in September, while gains against the Euro were even stronger, as the pound was up over 12% against the single currency in past four months.
Traders were strongly bullish on expectations of the end of the Brexit process and Conservative’s victory would further boost the pound, although the rally might be limited, as traders may start taking profits from four-month advance.
On the other side, the pound may suffer heavy losses if Labour wins the election and Jeremy Corbyn becomes a Prime Minister.
Such a scenario would be a big shock for the British pound, which could drop several big figures, according to market observers.
The preliminary results are expected in the night between Thursday and Friday and expected to provide initial signals for the markets, with financial institutions being on high alert in expectations of strong market reaction.
The results of the UK general election will be released on Friday.