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UK election: markets bet on May to carry the day

Wednesday, June 07, 2017 - 01:53

Britain's pound traded within a half-cent range against the dollar on Wednesday, staying near seven-month highs as investors increasingly take the view that Prime Minister Theresa May's party will win a majority in a general election on Thursday. David Pollard reports.

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Britain - together after recent terror attacks. But far apart on its politics. With newspapers shouting appeals to readers - and their security fears. Just one day ahead of a national election, many voters, though, still don't hear a clear message. (SOUNDBITE) (English) VOTER, ROBIN KINCHIN, SAYING "I think Theresa May's campaign has been appalling. Jeremy Corbyn doesn't really stand for what I believe in. So there's kind of no one to vote for." (SOUNDBITE) (English) VOTER, JOHN ELLIS, SAYING: "Who knows? I mean the polls are all over the place. This latest terrorist attack, who knows whether that plays to Corbyn's advantage or Theresa May's?" With some showing a 12 per cent lead for the incumbent, others just one per cent, the polls are indeed all over the place. If markets, for the moment, aren't. Sterling's held within a tight range around a seven-month high. As they bet on the ruling Conservatives. A surprise win for Jeremy Corbyn's opposition, for them unthinkable - almost. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: "If that were to happen that we'd see the currency sell off very sharply. We'd see a sharp spike in bond yields too. And I guess equity markets would also tank on the back of a programme which envisages a significant rise in corporate taxes and a huge expansion of public spending." Though that might be nothing compared to a return for the current prime minister ... But without the stronger majority she says she needs to lead Britain through Brexit. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: "A hung parliament is even more of a problem because we don't know what the policy outcomes will be, what the governmental outcome would be under those circumstances ...That I think would be at least in the short term the worst possible market outcome." London banks and brokers have been upping their election night staffing as the polls tighten. Theresa May winding up her campaign at London's biggest meat market. Just as some ask whether with this vote, she's bitten off more than she can chew.

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UK election: markets bet on May to carry the day

Wednesday, June 07, 2017 - 01:53