Update: The Conservative Party will hold talks with Northern Ireland’s Democratic Unionist Party (DUP) over the weekend to see if the two can reach an agreement whereby the DUP would informally support the Tories in Parliament with their ten seats in order to give Theresa May a majority.
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Exit polls from the UK general election have sent the Pound Euro exchange rate tumbling to a more-than 20-week low after suggesting that market’s worst fears have come true.
The GBP EUR exchange rate dropped from 1.15 to 1.13 on the back of the survey data.
According to the exit poll, the Conservatives will have lost seventeen seats, taking them down to 314; -11 below the number needed for a majority.
Labour is predicted to secure 266 seats, up 34, the SNP 34, down -22 and the Liberal Democrats up six seats to 14. The Green Party is expected to secure one seat.
The poll was conducted by GfK IPSOS Mori on behalf of the BBC, ITV News and Sky News, questioning 30,450 voters.
Coalition Could Cause Trouble for Brexit Negotiations
These are particularly troubling results, as it would take a coalition of Labour, the SNP, the Liberal Democrats and the Greens to overrule the Conservatives in Parliament.
The opposition parties are unlikely to agree to this, given the wide-ranging views held by their members on key issues – in particular Brexit.
This could leave the Brexit talks in deadlock, with the Conservatives unable to pass the legislation or get Parliamentary approval, but the opposition unable to agree on alternatives.
Lord Menzies Campbell has claimed that Tim Farron would find it difficult to enter into a coalition with Labour, given the differences in their approach to Brexit.
While Farron has suggested a second referendum on leaving the EU, Campbell has described Corbyn’s position as defying definition.
According to forecasts, there is a 90% chance of Labour stealing Conservative seats in Croydon Central, Brighton Kemptown, Bolton West and Bedford amongst others.
Potential for Hung Parliament Causes Pound Euro Exchange Rate to Sink
Unsurprisingly, officials from the Conservatives, Labour and the SNP have all stressed that exit polls are not always accurate and the actual results could vary wildly.
But the concerns of what implications a hung parliament could have for the Brexit process has sent the markets into a panic and so GBP/EUR has tumbled to its lowest levels since the 17th of January.
The first results are expected to have been announced by 23.00. Markets are likely to interpret the first result somewhat symbolically, so the Pound could flutter higher if the first seat goes to the Tories, or dip to a fresh low if Labour gets the most ballots.
