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After London attack, U.K. election has ‘all the predictability of a coin toss’

The U.K. general election already had been pushing around the
British pound, and then another terror attack hit the country
over the weekend.

The London Bridge attack on Saturday night
that left seven people dead has added to the uncertainty around
Thursday’s vote, according to some analysts.

But a fresh poll on Monday is providing a little calm to
markets, according to some stock pundits. The Guardian/ICM poll has given
an 11-point lead to the governing Conservative Party,
contrasting with other recent surveys that showed its edge was
as slim as 1 point.

The latest poll is getting credit for helping the pound

GBPUSD, +0.0543%

trade higher, to around $1.2910, recovering from a small loss
earlier Monday. And sterling’s strength is helping to push
U.K. stocks

UKX, -0.29%

 lower, as the currency’s gains tend to cut into the
foreign-denominated profits made by the FTSE 100’s
multinational companies.

Analysts have been offering their takes on the political
repercussions of London’s latest terror attack.

Below are some of their initial reactions:

• “The pound is … expected to remain volatile this week
against the backdrop of the tragic weekend events in London and
the flakiness of the polls in predicting what the outcome of
Thursday’s general election vote is likely to be, with the poll
gaps varying between 1 and 12 points in favor of the
Conservatives.

“With fluctuations of this magnitude, Thursday’s outcome is
turning out to have all the predictability of a coin toss.” —
Michael Hewson, chief market analyst at CMC Markets UK

• “After an initial dip when Asian markets opened, FX traders
have brushed off yet another terror attack on the UK and
GBP/USD is trading above $1.2850, and it is in the middle of
its most recent range between $1.3015 on the upside, and
$1.2769 on the downside.” — Kathleen Brooks, research
director at City Index

• “Moving into the final week before the UK election, traders
… have to take into account the impact of yet another
terrorist-related incident in the UK in the past three months
and the second attack of the election campaign.

“Initially, it seems as though markets have been minimally
impacted.” — Richard Perry, market analyst at Hantec
Markets

Read: 5 things to know about the U.K.’s general
election next week

And see: U.K. election—the worst, best and most-likely
scenarios for stocks

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