UK’s Labour Party, led by Keir Starmer, appears to be headed for a huge majority in the 2024 UK election, an exit poll suggested.
An exit poll said Labour is on course to win about 410 seats in the 650-seat House of Commons, while the Conservatives are projected to win 131 seats. The center-right Conservatives have governed the country since 2010. That would be the Tories’ worst result in the party’s two-century history and would leave the party in disarray.
The exit poll also predicts that the left-of-center Liberal Democrats will take 61 seats, and the right-wing populist anti-immigration Reform Party will win 13 seats. The Green Party is likely to win two seats.
The Scottish National Party (SNP) seems to be on the verge of defeat in the UK general election. The exit poll forecasts that the SNP will win just 10 seats in the UK parliament in Westminster, down from 48 in 2019.
Market reaction
The Pound Sterling (GBP) trades on a stronger note after the exit poll suggested the Labour Party will win a landslide victory. At the press time, the GBP/USD pair is up 0.04% on the day to trade at 1.2765.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, aka ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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