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Sterling suffers against the dollar as UK election uncertainty hits pound

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Sterling suffers against the dollar as UK election uncertainty hits pound

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As the UK general election campaign gets into full swing ahead of the May 7 poll the uncertainty and unpredictability over the outcome is having an impact on the value of sterling.

In the past week the pound has fallen to a five-year low against the US dollar.

The strain is beginning to show with the UK market, a traditional bastion of Conservative support, unimpressed by Labour’s policies

While at the same time foreign investors are concerned about a Tory victory and the promise to hold a referendum on whether Britain should stay in the EU or opt out.

Nick Parsons, from the National Australia Bank believes the large swings in the value of sterling will continue“We expect this pressure to go on because the one thing that seems to be for sure in this election is uncertainty on a scale we’ve never seen before.”

UK bookmakers William Hill now say a minority government is the most likely, offering odds of 7/4, or a 36 percent chance, on Labour and 11/4, or 27 percent, on Prime Minister David Cameron’s Conservatives.