
GBP surges as Brexit party pledge not to contest Tory seats
- The pound has surged after Brexit party announced it would not stand in Conservative-held seats at the general election next month.
- Farage’s comments and the likelihood of a clear victory for the Conservatives, remove some political uncertainty discounts on U.K assets.
On Monday, the GBP surged as Nigel Farage- Brexit’s party leader said his party would not contest any seats the Conservative party currently holds at the general election on Dec. 12.
The move has increased the chances of the Conservative Party, gaining a majority at the polls. The party will consequently implement the EU withdrawal agreement, Prime Minister Boris Johnson secured last month.
“We now have a Leave alliance, albeit we’ve done it unilaterally,” said Farage at a party meeting. “This prevents a second referendum from happening, and that to me today is the single most important thing in our country,” he added.
The Conservative Party currently holds 317/655 seats in the House of Commons. Although the Conservative Party holds a commanding lead in the national opinion poll, the first-past-the-post electoral system means the lead may still not be enough to guarantee a majority.
All major opposition parties have differing views and policies on Brexit. They all want to either revoke the initial decision to leave the EU or hold onto the second referendum.
The GBP surges with the likelihood of a clear victory of the Conservatives
Copy link to sectionThe GBP jumped around half a cent against both the dollar and the euro following Farage’s comments. The yield on the 10-year Gilt rose three basis points to 0.80%.
Farage’s comments and the likelihood of a clear victory for the Conservatives, remove some political uncertainty discounts on U.K assets. The Conservative Party victory would settle Britain’s long-term relationship with the EU- its biggest trading partner.
Earlier on Monday, the Office of the National Statistics announced that the U.K economy’s annual rate grew at its slowest since 2010 in the third quarter this year. Business investments also fared poorly. All these were effects of a chronic uncertainty over Brexit.
Farage’s move makes it easier for the sitting members of the parliament to resist challenges from the pro-Remain Liberal Democrats in areas such as London and southwest England.
“There were huge numbers of Brexit supporters out in the country who feared that if Nigel Farage and The Brexit Party did stand in every single seat, that they could well be the Party that caused Brexit not to happen at all,” Jonathan Isaby, told Sky News.
Isaby is the editor of the Brexit Central website.
However, it also makes it easier for the opposition to define their enemy as they campaign. They will emphasize that a vote for Brexit will also be a vote for a range of unpopular Conservative policies.
“A vote for Boris Johnson’s Conservatives is a vote for Nigel Farage’s politics,” Keir Starmer – Labour’s Brexit spokesman tweeted.
Besides Brexit, Farage has previously argued for the UK to reform its healthcare systems along insurance-based lines. His suggestions have generated intense resistance in the past.
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