And finally, here’s how the City’s drinking dens hailed the election:
“Euphoria returns to the City! Lobster Thermidor is back on the menu! Buy shares in lap dancing bars! The City is safe for five years.”
Roll on 2020.....
Anyway that’s enough from me, after another busy week. Goodnight,and thanks as ever. GW
Updated
But behind the numbers on the Footsie, fears of political instability are growing - over Scotland, over the strength of the domestic union, and the European union.
Over to Reuters.
“A good general election result for the UK economy, but not a good day for the United Kingdom,” said Richard Buxton, head of UK Equities at Old Mutual Global Investors in London.
“The scale of the SNP’s victory in Scotland, together with the scale of UKIP’s share of the national vote, at over 12 percent, confirms the extent to which we are an increasingly divided nation.”
The populist UK Independence Party, which favours withdrawal from the EU, surged into third place in the countrywide vote tally, although that translated into only a single seat.
Nigel Green, chief executive of deVere Group, said the rally in sterling, shares and bonds might be the calm before the storm, and advised clients to hedge themselves against a fall in the value of these assets due to political uncertainty.
“The prospect of an in-out referendum of Britain’s EU membership has gone from risk to a reality,” Green said.
The pound has clung on to its gains of 21 hours ago when exit polls sent shockwaves through British politics.
Sterling is still up 1.5% against the US dollar, at $1.547. It’s a similar story against the euro, the pound has gained over two cents at €1.377.
Updated
FTSE 100 surges 2.3%
There was no late twist in the City tonight. Investors stuck with their initial gut view that the Conservative’s crushing victory was bullish for stocks.
They drove shares in swathes of companies higher, once it was clear that Labour policies such as energy price freezes, rent controls or higher bank levies were all off the table.
Babcock, the engineering firm with a role in Trident, jumped by 9%. Centrica gained 8%, Royal Bank of Scotland rose by 6%, and Lloyds Banking Group wasn’t far behind.
The FTSE 100 index of blue-chip shares finished the day up 2.3%, or 159 points, at 7,046, its biggest rise sine January.
Fewer controls from the government may mean more profits for shareholders. But today’s rally also reflects relief that Britain won’t see weeks of political wrangling.
Laith Khalaf, Senior Analyst at Hargreaves Lansdown, dubs it “fabulous Friday for the UK stock market.”
Within that there are certain sectors which have done particularly well, as investors have reassessed their prospects in light of a Conservative majority administration.
Energy companies, house-builders, out-sourcing companies and banks have all seen big gains today, as the market views Conservative policies as better for these businesses.
Will these policies be better for consumers, though? We’ve got five years to find out....
Updated
No change at the top of the Treasury, with George Osborne being reappointed as chancellor of the exchequer.
Osborne has also been named as the highest-ranged minister in David Cameron’s cabinet.
I have re-appointed George Osborne as Chancellor of the Exchequer. He will also be First Secretary of State - the ranking Cabinet Minister.
— David Cameron (@David_Cameron) May 8, 2015
Here’s some post-election analysis from UBS Wealth Management:
- A Conservative government will continue on the path of deficit reduction, erasing concerns about the fiscal outlook which should support the gilt market
- An EU referendum is all but guaranteed now, giving an additional layer of uncertainty to the outlook. Markets will be watching carefully the pressure emanating from Tory backbenchers to take a more aggressive approach to the EU
- The dominant performance of the SNP will lead to further calls for devolution. Full fiscal autonomy cannot be ruled out, which could raise additional questions about the UK’s fiscal position over the medium term, as well as the path to English devolution.
With the threat of a price freeze behind it, Centrica says it welcomes the “certainty” of today’s result.
. @centricaplc says "immediate plan is to engage with the new Government on the functioning of the energy market"..
— John Moylan (@JohnMoylanBBC) May 8, 2015
Updated
Jasper Lawler of CMC Markets sums up today’s stock market action:
Markets breathed a sigh of relief at the continuity of a Conservative government and the reduced threat of the Scottish National Party destabilising the union through a coalition with the Labour party.
The sectors within the UK stock market that were most exposed to some of the interventions planned in The Labour Party manifesto were those that jumped the most on the Conservative win.
No price caps or suggestion of breakup of the major utilities companies meant Centrica was the top riser. No rent cap or mansion tax sent homebuilders including Barratt Developments and estate agent Foxtons soaring. Banks were all trading significantly higher as chances of the bank levy increasing were reduced. Transport companies including Stagecoach saw some big gains with the threat of partial nationalisation gone.
Summary: City buoyant despite Brexit risks
Time for a brief recap.
Britain’s stock market has surged today as investors welcomed the Conservative Party’s shock victory in yesterday’s general election.
The FTSE 100 has romped up by 2%, or 135 points, to 7021, led by companies who would have faced tougher regulation by a Labour administration.
Banks, builders, bookies and Babcock. stock mkt reaction to #GE2015 in four charts (via Rtrs) http://t.co/2EjhZ3P8CE pic.twitter.com/01MBrPWQy9
— Katie Allen (@KatieAllenGdn) May 8, 2015
And the pound is still clinging onto last night’s gains after exit polls showed a shock Tory majority.
Dominic Bryant, UK economist at BNP Paribas, provides a handy summary:
- The Conservatives look to have won an unexpected majority in the UK general election. The majority will, however, be thin.
- The Scottish National Party won 56 of 59 Scottish seats. Labour and the Liberal Democrats were the big losers.
- The Labour Party is likely to have lost around 25 seats relative to 2010, while the Conservatives seem to have gained 20-plus seats.
- Markets took the news positively, with the currency, equities and bonds all rallying. The clarity of the outcome is important, as it could have been far messier.
- This likely reflects a relief rally over a much clearer result than expected and a view that the Conservatives will run with more business-friendly policies.
This news story by Jill Treanor tells the full picture:
But two issues loom over the markets. The first is Scotland, with the SNP holding all-but three seats.
As Jeremy Cook of World First explained:
Nicola Sturgeon must decide what she does with her seats. Does she build a left-unity coalition, or keep banging the independence drum?
The second is Europe; with David Cameron confirming a few minutes ago that he will offer an in-out referendum.
Property companies are particularly upbeat, with Sotheby’s reporting a surge in interest from overseas buyers now there’s no chance of a mansion tax soon.
Updated
Other European leaders are now bracing for two years of gruelling negotiations over Britain’s future in the European Union, reports our Brussels reporter Ian Traynor.
Europe braces for David Cameron's EU demands after Tory election win http://t.co/aFmjvN4oT5
— Guardian news (@guardiannews) May 8, 2015
European Council president Donald Tusk has issued a warning to Downing Street too; saying he’s counting on David Cameron to argue for Britain to stay in Europe.
#GE2015 'I count on new Government making case for UK continued membership of the EU. In that I stand ready to help' - @eucopresident
— Ian Traynor (@traynorbrussels) May 8, 2015
Cameron also confirms he will hold the in-out referendum on Britain’s membership of the European Union which he promised.
David Cameron is speaking outside Downing Street now, confirming he will form a majority Conservative government.
Our main General Election liveblog has all the details:
Mark Boleat, Policy Chairman for the City of London Corporation, has fired a clear warning at the new government not to damage London’s businesses by risking a Brexit.
“What the Square Mile’s firms wanted to see was a Government that brings stability and certainty to the world of business. The City stands ready to support the new Government.
“At the top of the in-tray in the coming weeks and months will be the issue of the UK’s position in Europe. The business view is clear – Britain needs to be in the EU. The higher the perceived chance of Britain leaving the EU, the more damage there will be to investment in Britain. Reform would be good but we must work hard to articulate what that reform should look like.
Here’s another warning about the risks of Britain crashing out of the EU, from the director-general of the CBI, John Cridland:
“With an EU referendum now likely, business will now want to see an ambitious, achievable reform agenda that will make both the UK and Europe more competitive and prosperous for all.
The majority of businesses want to stay in a reformed European Union which opens up the world’s largest market of 500 million consumers.”
But big questions remain about David Cameron’s ability to get such reform, with Brussels unwilling to open up EU treaties (partly because everyone would want a piece of the action).
The pound has now gained ground against every rival foreign currency today:
Now, not a single #currency is rising v #sterling (out of 174)... pic.twitter.com/Q0qfbh9Rlz
— Mark Barton (@markbartontv) May 8, 2015
Philip Shaw of Investec has joined the ranks of experts warning that a Brexit referendum could spook the financial markets:
Once the dust has settled on the shocks and surprises of the 7 May General Election, there are a number of questions still to be answered. One other issue, we would also remind readers of is that the Conservatives have promised to hold a referendum on the UK’s EU membership by end-2017.
Although this is far enough down the line to not worry markets at this point, much like the Scottish independence referendum of September-2014, this could become a major market issue as we approach the poll.
Good headline from Investec Economics reaction, 'leaders resign left, right and centre… ' #GE2015 pic.twitter.com/EBoiTYv0Nb
— Katie Allen (@KatieAllenGdn) May 8, 2015
Moody's: EU referendum could hurt Britain's economy
Credit rating agency Moody’s has warned that a referendum over Britain’s European future could hurt the economy, and trigger a downgrade.
Kathrin Muehlbronner, Vice President-Senior Credit Officer at Moody’s, says:
“While the election result will have no impact on the UK’s rating, if the Conservative Party’s plan to hold a referendum on European Union membership results in the UK’s exit this could have consequences for the whole economy, including potentially for the sovereign rating, if the UK was unable to broadly replicate the benefits of membership.”
David Cameron has promised an “in/out” referendum on British membership of the European Union in 2017; a pledge his backbenchers will surely hold him to.
https://twitter.com/pressassoc/status/596637791183904769
The good news for the PM (who just arrived at Buckingham Palace) is that Britain’s economic prospects look brighter, Muehlbronner adds:
“The outlook for the country’s public finances has improved irrespective of the government’s composition: following several years of very subdued real GDP growth, growth accelerated significantly in 2014. We expect the economy to continue to expand at rates above 2% for the next several years, as the effects of the financial crisis fade.”
Moody's says #brexit "could potentially have consequences for sovereign rating". Risk hasn't disappeared following #GE2015 result...
— Jonathan Eley (@JonathanEley) May 8, 2015
And here we go: Moody's warns about UK ratings if UK votes for exit from EU
— Carolin Roth (@CarolinCNBC) May 8, 2015
Updated
Billions of pounds of shares change hands
It’s been another extremely busy morning on London’s stock market.
BATS Chi-X Europe, the stock exchange, repots that nearly €4.2bn-worth of FTSE100 stocks were traded between 8am and 10pm. That’s a third of yesterday’s FTSE100 total.
Thursday was twice as busy as usual across Europe’s stock markets, and Friday’s is looking at least as hectic.
BATS says:
If value traded stays at this pace over the day – and if bond markets put in another similar performance - total € traded across Europe by 4.30 p.m. could exceed yesterday.
Updated
Some economists reckon that the election result could mean interest rates could remain at record lows for longer.
The logic is that the Bank of England will feel less need to hike borrowing costs if George Osborne is implementing tougher fiscal policy in the Treasury.
David Page, senior economist at AXA IM, explains:
A modestly softer growth outlook and tightening fiscal stance suggests the MPC will not feel rushed into tightening monetary policy.
Conservatives now one seat away from a majority. Astonishing with a capital A.
— Elizabeth Day (@elizabday) May 8, 2015
Britain’s bankers reckon the election result is ‘good news’ for the economy (it’s certainly good news for bankers who didn’t fancy paying 50% income tax):
- BRITISH BANKERS ASSOCIATION CEO SAYS CLEAR ELECTION RESULT IS GOOD NEWS FOR BRITAIN AND FOR ECONOMY
- BBA CEO SAYS NEW GOVERNMENT NEEDS TO ENSURE THAT UK BANKING REMAINS GLOBALLY COMPETITIVE
- BBA CEO SAYS INDUSTRY WILL LOOK TO WORK WITH NEW GOVERNMENT IN A CONSTRUCTIVE MANNER
Shares are still buoyant in London, but they might slide once investors ponder the prospect of a referendum on Britain’s EU membership.
John Wyn-Evans, head of investment strategy at Investec Wealth & Investment, has sounded a note of caution:
The markets’ reaction to the result has been predictably positive, with the pound being the initial beneficiary. Gilt yields have also fallen on the prospect of more austerity and a lower deficit while shares are rising, unsurprisingly led by house builders, domestic retail banks and regulated utilities and outsourcing companies. To put things into perspective, though, that still leaves the index below where it was a week last Tuesday.
“However, without wishing to throw too much cold water on the celebrations, we will return to “business as usual” very shortly, and there is the small matter of a promised referendum on membership of Europe to negotiate.
The sight of David Cameron heading back into Downing Street has sparked a flurry of interest from wealthy foreigners looking to buy a multi-million pound house in London.
That’s according to Michelle van Vuuren, Managing Director of Residential Development at Sotheby’s International Realty UK. She says:
“A Conservative victory – whether outright or otherwise – will give the housing market what it wants: stability. The removal of the uncertainty that has clouded the last year of the Coalition will allow developers to plan confidently for the medium term with a consistent economic policy. Having said that, we do hope to see the Tories come good on their annual pledge of 200,000 new homes and freeing up Brownfield sites for development. Increasing the supply of homes is the only way to truly overcome the hurdles that the housing market places for the majority of buyers.
At the top end – for the next five years at least – a cessation of the clamour for a Mansion Tax will see a number of transactions that have stalled to come back on line as certitude creeps back into the market. It is going to be an exciting time to be in the London market over the Summer!
We are already taking calls from international buyers who want to get back into the market.”<end>
No wonder Foxton’s share price spiked this morning.
But I fear it won’t be a very exciting time for those workers trying to get onto the property ladder, though, or for renters who had hoped a Labour government might protect them from rising living costs.
Updated
Another sign that expensive houses are going to get even pricier
Douglas & Gordon's @ed_mead: "This is a very bullish outcome for London real estate markets at all price levels". £2m+ homes could go up 20%
— hilaryosborne (@hilaryosborne) May 8, 2015
£2m-plus houses will be in demand
Two property firms have just rushed out statements, predicting that the top end of Britain’s housing market will benefit from the Conservative victory.
Lucian Cook, Savills UK head of residential research, says:
With an effective Conservative majority, or Conservative-led coalition now looking like the most likely result, we expect much of the deferred demand from the pre-election period to flow back into the prime market over the remainder of 2015 and 2016, particularly given that the spectre of a mansion tax is now removed from the market.
Countrywide’s CEO Alison Platt also reckons that the most expensive houses will be in demand. Greenbelt land could be under threat too.
“We now expect there to be greater activity in the housing market, especially in the £2 million plus markets facing the prospect of a Mansion Tax.
“We anticipate this Conservative led Government to turn its attention from implementing policies that stimulated demand in the housing market to addressing the lack of housing supply. Sticking to its pledge to boost housebuilding through the provision of more affordable housing and more garden cities should prove welcome.
“The new Government could take this a step further by reviewing precisely what we call Greenbelt today and look to free up more land for sustainable development.
Updated
Champagne corks may be popping in the City this lunchtime, but when investors sober up they may remember that Britain faces several serious challenges.
The first is the unbalanced state of the UK economy. A budget deficit of 5% of national income is matched by a similar-sized balance of payments deficit, which reflects the fact that Britain consistently imports more than it exports. A fall in sterling will be needed to close the trade gap, and there will need to be a shift in economic focus from consumer spending to investment and manufacturing.
The second factor is politics. Conservative strategists will already be thinking about how to win again in 2020, and the best way of doing that is to get the economic and political cycles aligned. In broad terms, that means getting any bad news out of the way as quickly as possible. Specifically, it means the Government will want to front-load austerity in the hope that healthier public finances will permit tax cuts from the middle of the parliament onwards.
This strategy resulted in a sharp slowdown in growth in the first two years of the 2010-15 parliament, but given the election result, the Conservatives will be minded to adopt the same approach a second time.
The third factor is the possibility that Britain might vote to leave the European Union in the referendum that will now take place in 2017.....
More here:
Larry Elliott on why the post-election celebrations in the City may be brief - http://t.co/LlwLPFT9wo
— Fiona Walsh (@_fionawalsh) May 8, 2015
Vince Cable’s defeat means Britain is certain to get a new secretary of state for Business, Innovation and Skills.
Terry Scuoler, chief executive of EEF, the manufacturers’ organisation, is hoping for a “really big hitter” to tackle the UK’s long-term problems:
He or she will have an in-tray which will include the need to tackle some of the issues which will help Britain embed and build on the recovery.
These include reversing the trade deficit, tackling an energy policy which remains a mess and redoubling efforts to deal with a creaking infrastructure by getting on with important projects, especially building a new airport hub.
Here’s today’s City reaction in a garish, pushy nutshell:
Foxtons shares are up 13 per cent... http://t.co/JcVhEvFPo6 #GE2015 pic.twitter.com/y30d3H2Uz5
— Henry Mance (@henrymance) May 8, 2015
Foxtons, the upmarket London estate agent, can now keep operating without the prospect of a Mansion tax hitting business.
Updated
Engineering firm Babcock has rallied by almost 6.5% this morning.
Babcock has a big contract to build the next-generation of Trident submarines; analysts feared it was vulnerable if the Scottish Nationalist Party (which wants to scrap Trident) had supported a Labour government.
Transport stocks also surging, National Express, Stagecoach, Go-Ahead Group all higher.
— Michael Hewson (@mhewson_CMC) May 8, 2015
City trading floor have been gripped by the sight of Ed Balls, shadow chancellor, losing his Morley and Outwood seat by 422 votes.
on a trading floor in city: big cheer was heard when Ed Balls lost his seat..
— Louise Cooper (@Louiseaileen70) May 8, 2015
Simon Goodley has taken a quick poll of City Index traders.
The consensus is that FTSE might trade sideways from here and then a possibly volume spike and price rise if/when a Tory majority is confirmed.
There’s also the temptation to bank profits, as Chris Lodge, head of client management at City Index, explains:
“Clients who bought the FTSE yesterday are taking profits ....If you’ve been gifted 100 points on the FTSE, you’re probably going to pocket that.”
“There are also a number of people buying FTSE this morning, but these are all new positions. The assume that a Tory administration will automatically be good for the economy. That is also why there are a number of buyers of the banks.”
UK gilt yields dive
Britain’s government debt is also rallying this morning.
The yield on 10-year gilts has tumbled to 1.84%, down from almost 2% earlier this week. That means the cost of borrowing has fallen.
Nick Serff of City Index explains:
“Investors see the UK as a safe haven again. Gilts are a good place to place their money. The result takes the uncertainty out of it”.
The FTSE 250 index of smaller companies has just hit a record high.
Bookmaker Ladbrokes are up 10% (Labour had planned a crackdown on betting firms), followed by housebuilder Berkeley Group (+9%) and estate agent Savills (+8%).
FTSE250 at a record high #FTSE250
— Michael Hewson (@mhewson_CMC) May 8, 2015
Updated
Traders welcome election certainty
Nick Serff, senior market maker at City Index, explains why shares are surging this morning:
“After the global Greek euro concerns we had a snapback yesterday as the markets were oversold. But a potential Conservative majority is a big thing.
It’s the certainty it gives to the City. It is the best outcome for the FTSE.”
Serff also said that City Index’s clients had done well out of the election too, with “punters all buying the FTSE yesterday and this morning before the market opened.”
There are some stunning moves in the City this morning -- here’s the top risers on the FTSE 100.
Updated
Shares surge as trading begins
The FTSE 100 index has surged by 2%, or 148 points, in early trading t0 7028 points as the City welcomes the election result.
As expected, banks, energy firms and builders are leading the way. More to follow...
Shares have started trading in London, but we’ve not got the full opening price yet -- suggesting some companies are going to surge..
Still waiting on prints for UK banks out of the opening auction, that will give FTSE extra kick
— Joshua Raymond (@Josh_CityIndex) May 8, 2015
No coalition partner to appease = no watering down. So we get to see where £12bn of welfare cuts are coming from.
— Duncan Weldon (@DuncanWeldon) May 8, 2015
Britain should now brace itself for another bout of austerity. We know that £12bn of cuts are pencilled in; we just don’t know where.
As Vicky Redwood of Capital Economics puts it:
A Tory victory means that the economy will have to endure a fairly aggressive renewal of the fiscal squeeze.
There’s also a danger that business investment could suffer from uncertainty ahead of the referendum on UK membership of the EU, she adds.
The Conservatives are now projected to win a wafer-thin majority of two seats.
If he has increased vote share... That is first time in 60 years for an incumbent prime minister pic.twitter.com/WmitXDCnKQ
— Faisal Islam (@faisalislam) May 8, 2015
Shares in banks and energy companies are set to jump by over 3% when the stock market opens in 15 minutes time.
- UK BANK SHARES SEEN UP 3-4 PCT AFTER CONSERVATIVES’ STRONG BRITISH ELECTION RESULT -TRADERS
- CENTRICA, SSE ALSO SEEN UP 3-5 PCT ON CONSERVATIVES’ STRONG BRITISH ELECTION RESULT -TRADERS
Ed Miliband had vowed to freeze energy bills if he won power, and to raise the banking levy by £800m to fund more childcare for working families.
Housebuilding shares are also being called higher. Labour had vowed to impose rent controls if it won power, to prevent landlords raising living costs during a tenancy.
Sterling +2% vs euro, on course for its biggest daily rise since January 2009.
— Jamie McGeever (@ReutersJamie) May 8, 2015
Half an hour to go, and FTSE100 forecast to start +130 at 7017.
— David Jones (@JonesTheMarkets) May 8, 2015
Jeremy Cook: Markets will want answers on Scotland and Europe
I just caught up with Jeremy Cook, chief economist at currency exchange firm World First, who pulled an election all-nighter.
He explains that the pound jumped because last night’s exit poll was so decisive - showing that the Conservatives might come within 10 seats of a majority.
“A majority wasn’t priced in... so everyone has been given a little more certainty than they expected.”
Uncertainty of 2010 exit poll rattled the pound. Certainty of last night's has got sterling firing on all cylinders #GE2015
— World First (@World_First) May 8, 2015
But once the initial relief wears off, the financial markets will want to know what happens about Europe, and Scotland.
As Cook explains:
Nicola Sturgeon must decide what she does with her seats. Does she build a left-unity coalition, or keep banging the independence drum?
And he believes the Conservatives must now deliver on their promise on a referendum on EU membership.
It was a big issue in rural campaigns, and if David Cameron were to go back on it it would cause a lot of problems with the grass roots.
And indeed, the pound has dipped a little in the last few minutes as investors look to the future.
Sterling gains weakening off - maybe a tacit admission that questions on Brexit and Scottish Referendum need to be answered. #GE2015
— World First (@World_First) May 8, 2015
The pound is also romping up against the euro, gaining almost 2% to €1.3794.
There’s a real feeling of optimism building in the City. The FTSE is now expected to surge by 120 points, or around 2%.
We are now calling #FTSE100 to open +120 points and trade above 7000 level at 8am market open
— Joshua Raymond (@Josh_CityIndex) May 8, 2015
It didn’t take markets long to react to the 10pm exit poll shock:
GBP/USD: spot the exit poll moment. pic.twitter.com/oSOHTvzZjm
— Richard Barley (@RichardBarley1) May 8, 2015
Market analyst Louise Cooper reckons the pound could keep surging as more results come in:
This is because as the old mantra goes, “markets hate uncertainty”. Cameron has governed for the last five years and investors know what they are getting with Cameron and Osborne. Better the devil you know and all that.
Stan Shamu, analyst at IG, explains why the FTSE 100 is going to surge at 8am:
With the Conservatives appearing to have gained ground and unexpectedly gaining seats, this seems like it is the market friendly result. It remains to be seen how many additional seats the Conservatives will need from a partner but with the current projections it will be a tiny amount.
Election talk is likely to spill over into the weekend and it’ll be interesting to see how long the momentum in the FTSE and sterling can last.
My colleagues Claire Phipps and Andrew Sparrow have launched a new live-blog covering the general election aftermath:
FTSE 100 tipped to soar
Shares in London are expected to surge this morning, as City traders digest the news that David Cameron has pulled off an unexpected success.
Spread-betting firms are calling the blue-chip FTSE 100 index up around 100 points. Trading begins at 8am.
City boys betting through IG put Tories at 322. 'V busy night for traders'. Ftse bets predict 95 point surge.
— Jim Armitage (@ArmitageJim) May 8, 2015
Currently forecasting #FTSE100 to open +100pts when markets open in over 2hrs time
— Joshua Raymond (@Josh_CityIndex) May 8, 2015
Guardian front page 6am edition pic.twitter.com/rWeJVGff0l
— Paul johnson (@paul__johnson) May 8, 2015
Pound posts biggest jump since 2009
The pound has posted its biggest jump against the US dollar since 2009 , as the election results suggest the Conservative Party has triumphed at the polls.
Sterling leapt by 1% when the exit polls were released at 10pm, showing that the Tories could take 316 seats - nearly an overall majority.
The pound's been pretty stable since that exit poll spike at 10pm - still up 1% at $1.54 pic.twitter.com/JhtW7mfIhj
— Graeme Wearden (@graemewearden) May 8, 2015
And as early results confirmed the trend, the pound pushed higher. It has now gained 2 and a half cents to $1.55, a two month high.
According to Reuters data, it’s the biggest one-day gain against the US dollar since July 2009.
Updated
Introduction: City to hail Conservative success
Good morning.
The pound is soaring, and shares are set to surge in London, after one of the most unexpected general election results in recent British history.
After a dramatic night, David Cameron appears to be heading back to Downing Street, possibly even with a majority; something that looked highly until the exit polls electrified
With more than half of constituencies having declared their results, the Conservative party has just inched ahead of Labour, and on track to be the largest party by some distance.
#GE2015 results as of 6am ... http://t.co/V3ZjyEh6kZ pic.twitter.com/p0lMbeYxKS
— The Guardian (@guardian) May 8, 2015
It’s a pretty disastrous night for Ed Miliband and Labour, who’ve been wiped out in Scotland and made little progress in England. A bloody one for the Liberal Democrats too. And scores of major political figures have seen their careers grind to a shuddering halt.
All LibDem cabinet ministers have lost their seats and their jobs. Apart from @nick_clegg #GE2015
— Faisal Islam (@faisalislam) May 8, 2015
But Cameron’s success will be cheered by the City of London this morning, as the threat of weeks of coalition horse-trading recedes.
I’ll be tracking the financial reaction to the election in this live blog.
If you missed the action, you can catch up with Andy Sparrow’s rolling coverage:
