THE CONSERVATIVES have won the election and Boris Johnson has visited the Queen to ask her permission to form a government. But what does a Tory win mean for the pound and the euro or dollar exchange rate?
Results from Thursday’s general election give the Conservatives a landslide victory, meaning they will remain in power and progress with both Brexit and their election manifesto. The victory for the Tories was huge, taking 364 seats and 43.6 percent of the vote.
The resounding success gave the Tories a clear majority, having beaten the 326 threshold with ease.
Boris Johnson visited the Queen in Buckingham Palace this morning to ask her permission to form a government.
The next steps will be to follow through with their manifesto pledges, including overseeing Brexit.
But the new – and returning – PM will also have to make sure the economy stays up while doing so.
What does a Conservative win mean for the pound and exchange rate?
Nigel Green, chief executive and founder of deVere Group told Express.co.uk of the impact a Tory government has immediately had on the pound.
According to Mr Green, “Christmas has come early” for the pound as Mr Johnson’s certainty over Brexit causes the currency to surge.
Mr Green 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.
“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.”
This morning sterling gained 1.9 percent to $1.34 – its highest level since May last year.
The currency also jumped to a three-and-a-half-year high against the Euro.
Mr Green explained the increase was due to more political certainty for the UK, and now the economy could see a surge too.
He said: “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.”
Mr Green added: “The UK’s FTSE 100 will open higher on Friday morning.
“However, this is likely to be a positive knee-jerk reaction, with some gains likely to be given up throughout the day as most FTSE companies earn in dollars and the pound is stronger.”
The deVere CEO also advised caution despite the surge: “It now looks more likely that Boris Johnson will indeed be able to ‘get Brexit done.’
“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.”
In terms of Scotland’s position after Brexit, uncertainty over their future as part of the UK may fuel concerns for markets.
Mr Green explained: “The election result 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.”
However, it seems so far an overwhelmingly positive move for the pound according to Mr Green.
He said: “Boris Johnson’s election gamble has paid off.
“Christmas has come early for the pound, the British economy and UK financial assets.”