As Britain looked to be heading towards a hung parliament over night, a sharp downturn in the sterling market had investors concerned
There was a big drop in the value of sterling on Thursday night as uncertainty surrounding the results of the UK General Election deepened.
With the exit polls showing that Prime Minister Theresa May’s Conservative could fall short of an overall majority and confusion mounting, the markets took a downward turn.
“What we saw was an initial knee jerk reaction in sterling,” said senior analyst Neil Wilson.
“I think we want to see stability in the domestic political scene, especially at this really important moment when we are heading into Brexit negotiations and we need to have a government that is really fit for heading into that and the risk is that if we have a coalition or we have a minority government we just dont have that stability at home to take on Brexit,” he continued.
The exit poll predicted that Labour would make gains, but that the Conservatives would be the largest party.
However, without an overall majority, the prospect of a hung parliament, a coalition government, or even another general election, had an adverse effect on the value of the pound.