The pound has a spring in its step this Monday morning, merrily bounding up to a six-month high of over €1.17 and very nearly half a cent against the USD.
This boost follows a slow but steady rise over the past week. The issues of the 2019 general election, now only three and a half weeks away, are becoming clearer. And unlike the 2017 election, where issues like the “dementia tax” came to the fore, this time around they appear to be staying Brexit-based. There was an interesting interview with the opinion poll guru Sir John Curtice at the weekend, in which he clarified the issues rather well. If Boris Johnson gets a majority of 326 MPs or more, he said, Brexit goes ahead by 31 January. A majority around 320 and he may get it through.
Anything below that and he cannot form a government. In that eventuality, effectively we know there will be another Brexit referendum because all the other parties apart from the DUP are in favour of one. So while the chance of an overall Labour majority is “as close to zero as is possible”, there doesn’t need to be for Johnson, and Brexit, to be stymied.
So what are the chances of a workable Conservative majority? About about 2 to 1 on, or 66%, according to the UK’s pre-eminent polling expert.
Of course there is still a long way to go in this election, including the debates, and if there is an upset of any kind – though it’s unclear where that might come from at this stage – the pound could still go almost anywhere.
Sometimes when a barrier is reached the floodgates can open and the currency follows through with new highs. Then again, falling away is just as likely. It could be that the pound settles in now, with a Conservative victory beginning to be priced in. It will be an interesting morning.
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