about 4 years ago • 2 mins
Brits elect a new government on Thursday just 2 1/2 years after they last traipsed to the polls. Here’s our roundup of the vote’s potential market impact, and the key events to watch for on election night.
With just a couple of days left, almost all opinion polls predict a win for the Conservative Party 🔵
That said, the polls failed to anticipate the Leave victory in the 2016 referendum on European Union membership or 2017’s hung parliament – when no party could command a majority.
“The scope for surprise at this week’s general election is sizable,” according to a report from Goldman Sachs. “The share of voters that are still undecided — so late in the campaign — means that even a small swing in that slice of the electorate would lead to a hung parliament.”
The main market reaction will be seen in the pound, not stocks 💷 That’s because companies in the benchmark FTSE 100 get about 75% of their revenue from outside the country – and even the more domestically-focused FTSE 250 gets half.
“Markets will generally cheer on a positive result for the Conservatives,” according to Nordea. “Clarity is all that matters on the Brexit narrative.”
As always, however, investors have begun placing their bets before the event – and the options market shows more chance of the pound dropping than rising after the election.
An exit poll will be published at 10pm London time – as soon as voting ends. Watch it closely: it’s correctly predicted the headline result in four of the past five elections. The seat-by-seat results will be announced over the following hours, with about half declared by 3.15am 😴
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