Exit poll figures suggest a landslide victory for Labour and incoming British Prime Minister Keir Starmer.
This would mean a huge loss for the Conservative Party led by current Prime Minister Rishi Sunak, also known as the Conservatives, which has been in power for 14 years.
Labour is expected to win a landslide majority of 410 seats out of 650 in parliament, while the Conservatives are expected to win just 131. Meanwhile, the Liberal Democrats are expected to win 61 seats, and the UK Reform Party is likely to win 13 seats.
Interestingly, these results highlight a shift towards support for the centre-left, in contrast to the rise in popularity of the far-right movement in France. However, the results reflect the widespread disillusionment of the British public with the Conservative leadership, which has been blamed for the cost of living crisis, the failure of Brexit, and years of political instability.
Market reaction
GBP/USD: 5 minutes
GBP/USD Overlay Chart by TradingView
The official results of the UK parliamentary elections did little to determine the general direction among GBP pairs, as market players had already priced in the results a few weeks ago.
However, there was a notable decline in most pairs, especially GBP/AUD and GBP/JPY, as opinion polls confirmed that Labour was on the verge of a big win. Analysts say this result is likely to give the Bank of England the green light to cut interest rates sooner rather than later, as the political party has been pushing for a pro-domestic agenda.
Meanwhile, the cable also took some hits but managed to stabilize pretty quickly, as traders didn’t seem inclined to keep USD positions open for long, given the Fourth of July holiday and next week. NFP release.
After a few hours, the GBP pairs stabilized and started moving sideways, with the British currency continuing to decline slightly, except against the US dollar.