Boris Johnson’s Conservative party looks set to win a comfortable majority at this week’s UK general election, after a survey on Monday showed the governing party not only securing the larger share of the votes, but extending their lead over the opposition Labour party, which in turn catapulted the pound to its highest in nearly three years.
A poll of over 1,000 British adults by Survation showed the Conservative party would take 45 per cent of the votes, a rise of 2 per cent on a similar poll conducted the previous week, while Jeremy Corbyn’s Labour party would take 31 per cent, marking a decline of 2 per cent.
Trade British Pound / US Dollar CFD
Traders and investors took heart from the results, pushing the pound to its highest in nearly three years against the euro and to seven-month highs against the dollar.
“As with all polls, should the model continue to predict a Tory majority, sterling should remain well-supported going into polling day,” said Caxton FX strategist Michael Brown.
The euro was last down around 0.1 per cent against the pound at 84.10 pence, its weakest in 31 months, while against the dollar, sterling was up 0.25 per cent at $1.3164, its highest since May this year.
This week’s poll showed voters were less undecided ahead of the December 12 election, the fourth in almost five years that comes just weeks before the UK’s planned departure from the European Union, scheduled for January 30, 2020.
“As is normal as an election date draws closer, the level of respondents we interviewed who said they were undecided this week’s poll was 12 per cent, down from 17 per cent last week – and so some of the movement we are seeing in this week’s polling may be driven by the public, having seen the various TV debates and manifesto launches simply making their minds up,” said Damian Lyons, Survation chief executive.
Sterling, which is set for a rise of more than 5 per cent in the final quarter of the year against the euro, is still almost 10 per cent below where it traded in the run-up to the June 2016 referendum on leaving the EU.
Both Johnson’s Conservatives and Corbyn’s Labour party have promised to increase public spending to counter any negative economic impact from leaving the EU and plough the proceeds into hospitals, schools and policing.
From the campaign trail on Monday, Johnson told LBC radio that he was heading a “new government with a new approach”. “We’re putting the biggest ever amount into the NHS, £34bn, and we’re hiring 50,000 more nurses,” he said. The 50,000 figure includes the retention of 19,000 nurses who are already currently employed, the Guardian newspaper noted.
Labour shadow chancellor John O’Donnell was expected to tell an audience in London later on Monday that his party would start nationalising water and energy companies within 100 days of taking office.
Investors have been quick to punish the pound at any sign of growing support for the Labour party among voters. A poll on Nov 27 that showed the Conservative party’s lead over the opposition had narrowed hit the pound immediately. The currency has since gained 2.6 per cent, as subsequent polls have shown a growing likelihood of a Tory win later this week.
In spite of all these spending promises, Brexit has remained at the forefront of voters’ minds. Survation’s poll this week showed that nearly half of those who voted to leave the EU in 2016 that took part in this survey said they reported hearing about Brexit most from the media during this election campaign.
“Keeping Brexit at the front of the agenda seems to be a strategy that is working for the Conservative party. The Conservatives this week have the support of 76 per cent of Leave voters, up from 70 per cent in last week’s polling, and this is unlikely to be explained only by Brexit Party supporters who are almost ““fully squeezed” – by last week, 91 per cent of Brexit Party 2019 EP voters told us they were now planning to vote Conservative,” Lyons said.