Pound holds steady against US dollar after exit poll projects Labour landslide

5 July 2024, 02:00

The pound has held steady against the US dollar
The pound has held steady against the US dollar. Picture: Alamy

By Emma Soteriou

The pounds has held steady against the US dollar after the general election exit poll projected a Labour landslide.

Listen to this article

Loading audio...

Sterling was relatively flat against the US dollar, remaining around 1.276, and against the euro, holding at 1.18, after polling stations across the country closed at 10pm.

A large Labour majority had been widely expected and priced into financial markets, leading to a muted reaction for the pound.

Currency movements typically indicate the immediate reaction from financial markets to events that could have an impact on the political and economic landscape.

Follow live as Britain decides on the election night blog

Exit Poll: Instant reaction from LBC's Britain Decides hosts

Chris Beauchamp, chief market analyst at trading platform IG, said: "The exit poll has provoked little volatility in foreign exchange markets, as the expected Labour landslide is duly predicted.

"The stability that would be provided by such a win would mean investors can cross 'UK political risk' off their list of worries for the time being."

Economists for Investec Economics said a large Labour majority was "well trailed" by several opinion polls, hence the pound failing to "react virtually at all".

"What will matter more to markets, ultimately, is what a Labour government chooses to do if and when it takes office," Investec said.

Read more: Conservative former Justice Secretary Robert Buckland loses seat, in Labour's first gain from Tories

Read more: Labour wins Houghton & Sunderland South as first seat of 2024 general election declared

Sadiq Khan analyses Labour's 'landslide win' in General Election

The exit poll suggests that Labour will take 410 seats - with a majority of 170.

It would mean a Labour prime minister in No10 for the first time since 2010.

Rob Wood, chief UK economist for Pantheon Macroeconomics, said: "If the final results approximately match the exit poll, Keir Starmer would have a large enough majority to plot a stable policy course, which should unlock more business investment and attract greater foreign investment."

However, he warned that higher government spending and borrowing, that is currently budgeted for, could slow down Bank of England policymakers in their path to cutting UK interest rates.

More Latest News

See more More Latest News

A series of Israeli strikes have been launched against the Houthi-controlled port city of Hodeidah in Yemen

Israel launches series of air strikes on Houthi-controlled city in Yemen day after group claim deadly attack on Tel Aviv

Jay Slater and his mum, Debbie Duncan

Jay Slater's GoFundMe page hits £70k after teen's mum appeals for funeral donations

Holidaymakers have been left stranded during global IT outage

'We're not being given any information': Furious holidaymaker stranded in Rhodes tells of travel hell after IT outage

A burnt out car in the Leeds suburb of Harehills, after vehicles were set on fire and a police car was overturned as residents were warned to stay home following an outbreak of disorder on Thursday evening. Picture date: Friday July 19, 2024.

Further unrest in Leeds as hundreds take to streets to 'demand return of children' allegedly removed from local family

NHS England has warned of "continued disruption" to GP services into next week.

NHS warns of GP disruption after global IT outage as trains, planes and roads remain in chaos leaving Brits stranded

Planes, trains and roads have been hit by travel chaos following Friday's IT outage.

Holiday hell: Trains, planes and roads in chaos after global IT outage - with thousands of Brits stranded abroad

Graham Gomm

Prisoner who escaped custody at HMP Wormwood Scrubs during hospital trip is arrested following manhunt

Charles and Camilla attend the King's Parade outside Pomme d'Or Hotel, Liberation Square in St Helier, Jersey

Charles and Camilla 'rushed to safety by security' after suspect 'spotted on roof' just days after Trump rally shooting

A highway bridge collapsed in northwest China.

At least 12 people dead and more than 30 missing after China bridge collapses due to flooding

Ray Reardon has died

Snooker legend Ray Reardon dies aged 91 after cancer battle

Steve Baker and Tom Tugendhat

Top Tory reveals why he is backing Tom Tugendhat to 'put the party back together' as leader

The National Lottery site and app is down

National Lottery down as users unable to access site and app day after global IT outage

Thousands of flights were cancelled across the globe on Friday.

Travel misery continues as global IT outage 'could take weeks to clear' - with over 5,000 flights cancelled worldwide

Nadiya Bychkova allegedly made a complaint to Strictly bosses

Strictly pro Nadiya Bychkova breaks silence over 'complaint' amid misconduct scandal

An independent review has recommended teachers and nurses get 5.5% pay rises

Teachers and nurses among millions of public sector workers that should get 5.5% pay rise, ministers told

Tom Tugendhat

Two top Tories back Tom Tugendhat to be next Conservative leader