Hung parliament would deliver pound drop, predicts deVere CEO

The pound will fall to $1.20 against the US dollar next week in the event the UK election delivers a hung parliament, according to the CEO of one of the world’s largest independent financial advisory organisations.

Founder and chief executive of deVere Group, Nigel Green, made the prediction following the latest polling – which indicates the Labour party is closing the gap on the Conservatives ahead of next week’s General Election.

Green highlighted several polling results that suggested increasing support for Labour, including those from Kantar which suggested an increase of 5% for Labour, Ipsos MORI which flagged a gain of 4%, as well as YouGov poll results which have also showed increasing Labour support.

Green said: “The overwhelming majority of polls tracking the UK election clearly suggest growing support for Labour. The surge for Labour in the recent polls, which raises the spectre of another hung parliament, has been reflected by the dip in the pound against the dollar, the euro and other major currencies.

“Sterling fell 0.2% to $1.29 on Monday with the odds on a hung parliament being delivered next week narrowing to as low as 7/4 – down from 9/4 last week. I think we can expect the pound to fall to $1.20 in the event of another hung parliament.

“A hung parliament is likely to lead to another EU referendum and another Scottish independence referendum. This would intensify uncertainty, perhaps into 2021. Uncertainty is something financial markets loathe, and this is why the pound has dipped on the news of Labour closing in on the Conservatives ahead of this crucial Brexit election.”

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