Britain’s pound rallied to its highest level since May 2018 as an exit poll indicated Boris Johnson’s Conservative Party will secure a strong majority in the UK election, raising hopes of an end to the Brexit deadlock.
Sterling jumped 2.3 per cent to $US1.3460. It also strengthened by 2 per cent to 82.90 pence per euro, the highest since 2016 and the immediate aftermath of the EU referendum. The gains came as the survey undertaken by the BBC and other broadcasters said the party was on course to win 368 seats in the House of Commons, a majority of 86. That compares with the 28 seat majority projected by the YouGov opinion poll published earlier this week.
The sizable majority would allow Johnson to push his Brexit deal through Parliament by the end of January and move on to trade talks with the European Union, without having to rely on the votes of the pro-Brexit caucus known as the European Research Group.
“The numbers that people expected were 330 maybe 350 so to see 368 on the screen is incredible,” said Jordan Rochester, a currency strategist at Nomura International in London, speaking to Bloomberg Television. “The pound’s at $US1.34, I think it can go to $US1.3450, $US1.35. Unless the exit poll is wrong, it can stay there.”