Britain's Labour Party set for huge election win, exit poll shows

Reuters

Britain's Labour Party set for huge election win, exit poll shows

Jul 4, 2024 at 9:44 pm GMT

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Updates with latest comments

LONDON, July 4 (Reuters) -Keir Starmer will be Britain's next prime minister with his Labour Party set to win a massive majority in a parliamentary election, an exit poll on Thursday indicated, while Rishi Sunak's Conservatives are forecast to suffer historic losses.

Sterling was little moved,with traders having widely anticipated a Labour victory. It traded at around $1.2758 and 84.74 pence per euro just ahead of the exit poll GBP=, EURGBP=.

Financial markets have been priced for a Labour government with a strong majority in parliament supporting its centre-left policies.

The poll showed Labour would win 410 seats in the 650-seat parliament, ending 14 years of Conservative-led government.

COMMENTS:

MICHAEL BROWN, SENIOR RESEARCH ANALYST, PEPPERSTONE, LONDON:

"The result was bang in line with what markets priced six weeks ago, right at start the start of the campaign. So, no surprise that cable is flat as a pancake. First thing, it is only an exit poll. They are usually very, very accurate here in the UK but there is a margin of error. So we’ll have to watch those results as they come in throughout the night.

"There is a lot of spending that (Labour) have pledged as well and only 20 billion pounds’ worth of fiscal headroom – give or take – so how those book are going to be balanced is a key question.

And this plan for growth, 2.5% annual GDP growth is punchy, if I’m being kind, kind of fanciful if I’m being slightly less kind and if we don’t get that growth relatively quickly, you could be looking at a pretty sign fiscal tightening going on."

FRANCESCO PESOLE, CURRENCY STRATEGIST, ING, LONDON:

"The projection was a bit lower than expected for seats won by Labour, and the Conservatives did a bit better than expected.

"The reaction in markets is showing us that this doesn't really matter and sterling hasn't really moved. That shows markets were pricing in a landslide Labour victory."

"The plan for Labour to not raise taxes and try and grow the economy is very optimistic."

CHRIS BEAUCHAMP, CHIEF MARKET ANALYST, IG, LONDON:

"The exit poll has provoked little volatility in FX 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. While there is a long night ahead of us, the focus now shifts across the channel to France, where Sunday night’s election could have bigger ramifications."

FIONA CINCOTTA, SENIOR MARKETS ANALYST, CITY INDEX, LONDON:

"There were no nasty surprises – no surprises, full stop in fact. So everything as expected, everything has been priced in."

"What’s going to be really interesting – and we’ve been speaking about it a lot coming into these elections – is there isn’t actually that much headroom for dramatic change in fiscal policy. So, the Bank of England are going to be sleeping easy for the time being."

KENNETH BROUX, HEAD OF CORPORATE RESEARCH FX AND RATES, SOCIETE GENERALE, LONDON:

"It looks like a landslide victory, but the projected majority is at the lower end of the range expected."

"We know Labour were going to win, so this doesn't change much and this isn't a game-changer for sterling. We now want to know what Labour's plans are."

"Investors have been long sterling and sentiment has been good and the results won't change that."

COLIN ASHER, SENIOR ECONOMIST, MIZUHO, LONDON:

"Labour has marginally underperformed versus some of the latest polls, but nonetheless have a huge majority. If you had offered them this result 6m ago – they would have bitten your hand off."

"Unsurprisingly, sterling was almost unmoved by the exit poll.

"Alas, thrashing this government at the polls is the easy part. Now the hard works starts. Expectations will be high and the funds to meet those expectations are limited."

CHRIS SCICLUNA, HEAD OF ECONOMIC RESEARCH, DAIWA CAPITAL MARKETS, LONDON:

"The exit poll in line with expectations.

"A landslide for Labour means everything in the manifesto will be delivered. There are question marks around which taxes will raised to fund what is likely to be higher spending needs because the existing public sector projections are not particularly realistic for the current state of public services."

(Compiled by Dhara Ranasinghe and Amanda Cooper.)

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