Value of the pound surges to its highest level against the euro in six months after Nigel Farage tells Boris Johnson he will give the Tories a clear run in 317 seats at the general election on December 12
- Nigel Farage said today the Brexit Party will not stand candidates in 317 seats
- Those are the seats the Conservative Party won at the 2017 general election
- The decision boosts Boris Johnson’s hopes of winning a majority December 12
- Value of the pound surged against euro and dollar after Mr Farage’s spoke
Nigel Farage’s general election gift to Boris Johnson prompted the value of the pound to surge to a six month high against the euro.
Mr Farage announced at lunchtime that his Brexit Party will not stand candidates in the 317 seats won by the Tories at the 2017 general election.
The decision to give the Conservative Party a clear run in those constituencies boosts Mr Johnson’s hopes of winning a majority on December 12.
The currency markets responded to the apparently reduced chance of another hung parliament as sterling jumped as much as one per cent against the US dollar.
The value of the pound against the Euro surged after Nigel Farage said the Brexit Party would give the Tories a clear run in 317 seats on December 12
Sterling also spiked against the dollar after the announcement which boosts Boris Johnson’s hopes of winning a majority
Meanwhile, the pound rose to its highest point against the euro in more than half a year.
The pound rallied to as much as $1.2896 after Mr Farage announced the move at an event in Hartlepool at lunchtime, before then easing to $1.2880.
Versus the euro, the pound strengthened to its highest in six months, at 85.62 pence.
‘The Tories will be heaving a sigh of relief and it also reduces at the margin the prospect of a hung parliament,’ Neil Mellor, FX strategist at BNY Mellon said.
‘The market has shown a tendency of being supportive of a clear result,’ he said.
Mr Mellor said that the pound’s positive reaction implied markets have been more cautious because they were taking into account the possibility of a Labour victory.
Mr Farage’s decision means Mr Johnson, pictured on the campaign trail in Wolverhampton today, stands a better chance of keeping the seats the Tories won in 2017
Mr Farage, pictured in Hartlepool today, said he intended to focus the Brexit Party’s efforts on winning seats held by Labour or Remain-backing parties
‘The Tories (Conservatives) are also seen as more market-friendly than Labour,’ he said.
Meanwhile, Lee Hardman, a strategist at MUFG said that, if the Brexit Party stood down candidates, it could clear the way for Mr Johnson to implement his divorce deal with the EU.
The pound had already risen above $1.28 before Farage’s announcement, after data showed the UK economy dodged recession in the third quarter of 2019, expanding 0.3 per cent.
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