LONDON (AP) – A day ahead of Britain’s general election, investors are cautious of a vote that seems tighter than anticipated and could have long-standing repercussions on the country’s exit from the European Union and its economic outlook.
For the British pound, it could be particularly impactful.
The currency, long one of the key elements of the international financial system, has suffered bouts of volatility since Britain’s vote last year to leave the EU and is likely to be the focus in markets as the results come in.
When Theresa May made her surprise call for the election in April, the pound surged 3 cents to $1.29 on optimism that her Conservative Party would win convincingly, giving her a stronger hand in the upcoming Brexit discussions. That put the pound at its highest since early October, a level it has since held.
But since April, polls have shown the Conservative lead narrow sharply, raising questions about what the outcome might mean for the British economy and the Brexit talks, which are officially due to begin this month.