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UK General Election: How Would A Conservative Victory Affect the Pound Sterling to Euro (GBP/EUR) Exchange Rate?

In this article, we will look at how a Conservative Party election win could affect the Pound Sterling to Euro (GBP/EUR) exchange rate.

With voting underway, in what has been called the ‘tightest election in decades’ the Pound has weakened against the majority of its most traded peers.

The outcome of the vote is far from certain and the final polls show that support for the Conservatives and Labour is neck-and-neck. As demand for smaller political groups has increased, the most likely outcome will be that either the Tories or Labour will have to negotiate to form a coalition government. There is also the possibility that whoever wins the most seats could attempt to go it alone as a minority government.

The Pound Sterling to Euro (GBP/EUR) Exchange Rate Hit A Session High Of 1.3836

The Conservative Party is the oldest political group in the UK having been founded back in 1834 and is of the centre-right. Traditionally the party is regarded as the party for the more wealthy parts of society and is known for supporting and promoting traditional values and institutions.

The party took power alongside the Liberal Democrats in 2010 and has overseen a remarkable turnaround in the UK economy.

Following the long tenure of the Labour Party and the onset of the global financial crisis, the national economy was on its knees. Over the past five years, however the coalition has overseen a sharp rise in job creation and has set the UK on the path to overtake France as Europe’s second largest economy.

The Conservatives are deeply unpopular with those who support the leftist parties and are particularly in Scotland and the north of England, as those areas have not forgiven Margaret Thatcher for the closure of mines, dockyards and other manufacturing industries that dominated the northern economy.

Can the Conservatives be trusted with the UK economy?

The Conservatives are often regarded as the best option for the British economy as they tend to be thriftier when it comes to spending. Their record for the past five years also supports this view as the UK economy has gone from struggling to become one of the fastest western economies in the world.

This time around however, there is a slight snag. In an attempt to appease UKIP voters, the Tories have promised to hold an in/out referendum on the UK’s membership of the European Union in 2017. Such a vote is seen by the markets as potentially harmful to the economy.

The Pound Sterling to Euro (GBP/EUR) exchange rate is set to remain highly volatile until the result of the vote is revealed on Friday. After that, the currency pair will remain under pressure as coalition negotiations are expected to take some time. If the Conservative’s do manage to win a majority, the Pound will rally strongly against its peers.

Currently the Pound Sterling to Euro (GBP/EUR) Exchange Rate is trading in the region of 1.34