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British Pound Falls on U.K. Election Projected Results | British Pound Falls on U.K. Election Projected Results |
(about 4 hours later) | |
LONDON — The British pound fell sharply late on Thursday, hit hard by an exit poll showing that Britain’s incumbent Conservative Party had unexpectedly lost its majority in Thursday’s election. | LONDON — The British pound fell sharply late on Thursday, hit hard by an exit poll showing that Britain’s incumbent Conservative Party had unexpectedly lost its majority in Thursday’s election. |
The exit poll showed that the Conservatives, led by Prime Minister Theresa May, would remain the largest party in Parliament but had failed to retain an overall majority. If the results bear out, they would result in a so-called hung Parliament, leaving the Conservatives to search out a smaller political party to form a coalition government. That outcome would also complicate the prospects for the country’s negotiations to depart the European Union. | The exit poll showed that the Conservatives, led by Prime Minister Theresa May, would remain the largest party in Parliament but had failed to retain an overall majority. If the results bear out, they would result in a so-called hung Parliament, leaving the Conservatives to search out a smaller political party to form a coalition government. That outcome would also complicate the prospects for the country’s negotiations to depart the European Union. |
Analysts warned in the run-up to the election that the pound would be particularly hit by such uncertainty, but polling during the campaign had suggested that Conservatives would retain a majority in Parliament. | Analysts warned in the run-up to the election that the pound would be particularly hit by such uncertainty, but polling during the campaign had suggested that Conservatives would retain a majority in Parliament. |
The publication of the exit poll at 10 p.m. local time, however, sent the British currency sharply lower, and it fell as much as 1.7 percent to $1.2739. The Japanese yen, despite its reputation as a safe haven, weakened slightly during the Asian day. Markets in Japan, China and South Korea all ended the day slightly up. | |
“The exit poll has certainly produced a shock wave in markets, with disbelief and then a swift drop in the pound,” said Chris Beauchamp, chief market analyst at IG Markets. “Once again, it seems as if the British public has decided to surprise everyone.” | “The exit poll has certainly produced a shock wave in markets, with disbelief and then a swift drop in the pound,” said Chris Beauchamp, chief market analyst at IG Markets. “Once again, it seems as if the British public has decided to surprise everyone.” |
The outcome — if the exit poll results are confirmed — follows a referendum a year ago in which Britain voted to withdraw from the European Union. The so-called Brexit vote also sent the pound lower, because investors worried that the decision would have a negative impact on Britain’s economy. |