Pound in ’biggest surge in decade’ after Tories destroy Labour at the ballot box
The pound has surged against the dollar after the Conservatives secured a huge majority in Parliament.
Sterling bounced 2.2% to 1.40$, in its highest surge in more than a decade as the Tories break the deadlock that has gripped the House of Commons for more than two years.
The pound also jumped to a three-and-a-half high against the Euro.
But, despite Prime Minister Boris Johnson’s impressive campaign victory, the CEO of one of the word’s largest financial advisory organisations said there would be serious challenges ahead.
Nigel Green, chief executive and founder of deVere Group said: “The pound has enjoyed its biggest surge in a decade on the hopes that a solid Conservative majority can finally end the Brexit deadlock.”
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He continued: “Many traders were caught off guard by the size of the majority and this may push the pound even higher than previous predictions.
“We could see bullish traders now take it to $1.38 or maybe even as high as $1.40.”
Mr Green added: “With more political certainty due to the large majority, the UK economy is also likely to receive an election bounce.
“Billions of pounds in business investment that has been on the sidelines due to the parliamentary paralysis is now ready to be unleashed. This will give a much-needed boost the slowing British economy.”
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The deVere CEO said it was “more likely” that Mr Johnson would be able to get Brexit done – something the Tory leader has vowed to do by January 31.
Mr Green said: “His party’s large majority in the Commons helps him pass his Brexit deal and it gives him more political sway when negotiating the UK’s future relationship with the EU and reducing the risk of no-deal at the end of 2020.
“However, there’s still a long way to go. Mr Johnson’s self-imposed end of December 2020 deadline is a mammoth challenge, and a no-deal Brexit is still possible on 1st Jan 2021.
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He adds: “The result election also puts a question mark over Scotland’s future in the United Kingdom. The SNP’s gains will embolden them in their key aim of securing Scottish independence.
“Mr Johnson’s monumental task to deliver Brexit with a deal and the Scotland issue will continue to fuel uncertainty in 2020.”
Mr Green ended, saying: “Boris Johnson’s election gamble has paid off. Christmas has come early for the pound, the British economy and UK financial assets.”
- Boris Johnson
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