The pound has strengthened following Labour’s landslide victory in the general election.
Sunak to Deliver Final Statement as PM at 10:30 am
- Outgoing Prime Minister Rishi Sunak is scheduled to make a statement at approximately 10:30 am, according to Downing Street.
- Following this, he will travel to Buckingham Palace for an audience with the King, where he is expected to formally tender his resignation.
- Sir Keir Starmer will then meet with the King at the palace, where he will be appointed as the next prime minister and asked to form an administration.
- Sir Keir is expected to arrive at Downing Street to address the nation for the first time as prime minister around 12:20 pm.
- Downing Street noted that these timings are subject to change.
Sterling has risen by 0.2% against the dollar to $1.277 since the first exit poll indicated Sir Keir Starmer’s path to Number 10.
Labour is projected to win 410 seats, while the Conservatives are expected to secure just 131 seats, a significant drop from their 365 MPs in 2019.
The FTSE 100 opened 0.3% higher, and the more domestically focused FTSE 250 increased by 0.9% post-election.
Deutsche Bank’s chief economist, Sanjay Raja, stated that markets will now focus on the upcoming King’s Speech to gauge Sir Keir Starmer’s priorities for his first year in office.
He noted: “While the Labour Party’s manifesto pledges entail minimal additional public sector spending, the critical factors for the economy (and markets) will be the policy measures Labour has yet to detail fully.
“Four key areas are investment (through the National Wealth Fund), defence, planning reform, and trade with Europe. These factors present substantial upside risks to GDP growth, including potential growth.”
Krishna Guha, an analyst at Evercore, commented that “for the first time in years, the UK will be a relative island of political stability,” which he suggested could reduce the risk premium on British assets and potentially enhance asset values.
