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How to trade on the UK general election 2024
Learn how you could trade the UK general election – as well as how to hedge your portfolio and manage your exposure – with Australia's No.1 CFD provider.1
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Tips for trading the UK election
Tips for trading the UK election
Hedge your portfolio or GBP exposure with CFDs
Set price alerts to notify you of significant movements before, during and after an election
Cap your maximum risk by placing guaranteed stops on your positions2
Be ready to go long or short whenever opportunities arise, even at the weekend
Trade on the go and react to breaking election news with our free trading app
Why trade the UK general election with IG?
Trade GBP/USD CFDs from just 0.9 points
Go long or short with CFDs on a range of currency pairs including all major GBP, EUR and USD crosses
Risk management
Our guaranteed stops only incur a fee when triggered2
Choose from a range of price alerts
Stay informed of market movements with percentage and point-based price alerts – exclusive to IG
Trade exclusive weekend markets
Speculate or hedge 24/7, with weekend CFD trading on GBP/USD and FTSE1003
When is the next UK general election?
The next general election is set for 4 July 2024, after Rishi Sunak called an early election. The surprise decision disrupted predictions of an autumn election.
How to trade the UK general election
You can trade the election by speculating on markets such as indices, shares and forex pairs. FTSE 100, GBP/USD and UK stocks all tend to move in the run-up to an election, and often continue to move in the fall out of the result – meaning there is opportunity to profit from the UK general election.
CFDs enable you to profit from markets that are rising or falling during a UK general election. This is because you can speculate on the price of an asset without taking direct ownership of it.
However, if you prefer to buy stocks outright, you can do so with our share trading service. Owning shares enables you to profit from increasing share prices, as well as through any dividend payments issued by the company.
How can you hedge risk during the general election?
You can hedge risk during a general election by opening positions that will turn a profit if the assets you own start to lose money. With IG, you can hedge against:
Sterling volatility
Through CFDs, we offer forex pairs including GBP/USD, EUR/GBP and GBP/EUR, enabling you to insulate yourself from currency risk
Share portfolio risk
CFDs enable you to go short on major indices and over 12,000 shares, so you can protect your entire portfolio from downside risk
Weekend movements
Maximise your opportunities by trading 24/73 on GBP/USD, FTSE100 and major cryptocurrency CFDs
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Open an account now
Open an account now
Fast execution on a huge range of markets
Enjoy flexible access to 11,000+ domestic and international shares and ETFs, with reliable execution
Deal seamlessly, wherever you are
Trade on the move with our award-winning trading app*
Feel secure with a trusted provider
With more than 51 years of experience, we’re proud to offer a truly market-leading service
*Best Finance App, Best Multi-Platform Provider and Best Platform for the Active Trader as awarded at the ADVFN International Financial Awards 2024.
What traders should look for in the general election
General elections often cause increased volatility, and this election could be the most volatile in recent memory. Below are some tips for trading the December UK election:
- Watch the polls: The polls do not always get it right, but they are the best barometer to measure the public’s voting intentions. It is best to track as many polls as possible, because the findings from one can be very different to another
- Keep track of sterling: Sterling can be influenced by the policies of the government that comes into power. Remember, when you trade forex, you're trading the pound against another currency
- Consider safe havens: Safe havens can help to protect you against increased volatility during the election. Assets that are often considered safe havens include commodities and currencies such as gold, and the Swiss franc
Markets to watch
All sterling-denominated markets experience increased movements both in the run up to and during a general election, including British indices, stocks and GBP forex pairs.
However, different outcomes will affect the markets in different ways. For example, if the result is certain to be a clear majority, markets usually react favourably. This is true regardless of the party that is predicted to win, although markets tend to prefer parties with pro-business policies rather than those that are seeking greater regulation.
Alternatively, if either of the two main UK parties stand a chance to win, markets will tend to remain relatively flat in the build up to the election. If a hung parliament is expected, there tends to be greater market uncertainty.
- FTSE
- Pound
- Shares
What might happen to the FTSE 100?
The FTSE 100 historically moves in the run-up to a general election. However, whether it gains or drops depends on the predicted outcome. For example, in 1987, the FTSE 100 gained 9.70% in the six-week period ahead of the election on expectations that Thatcher’s Conservatives would achieve a landslide victory – which she did.
The next election was in 1992, and it saw the FTSE 100 lose 4.90% in the six-week lead up. This was because many polls expected a hung parliament which increased market uncertainty – despite an eventual Conservative victory.
In other years, the FTSE 100 remained flat – for example, in 2015, it fell just 0.10%. This was largely on the expectation that the election would be the closest in history. The table below gives the full effect of general elections on the FTSE 100 during a six-week lead up since 1987.
Polls have predicted that Labour will win the next UK general election, which could indicate that the FTSE might rise on the expectation of a certain victor. However, polls could close throughout the election campaign trail.
| Year | Polling prediction | Winning party | FTSE 100 gain or drop |
| 1987 | Conservative majority | Conservative | +9.70% |
| 1992 | Hung parliament | Conservative | -4.90% |
| 1997 | Labour majority | Labour | +4.40% |
| 2001 | Labour majority | Labour | +1.40% |
| 2005 | Labour majority | Labour | -0.40% |
| 2010 | Hung parliament | Conservative coalition | -8.15% |
| 2015 | Either party could win a majority | Conservative | -0.10% |
| 2017 | Conservative majority | Conservative coalition | +4.10% |
How could the pound move during the election?
Typically, GBP crosses including GBP/USD see increased volatility during a UK general election. For example, in the month leading up to the June 2001 election, GBP lost 3.52% of its value against USD. It eventually bounced back, achieving pre-election prices a couple of months later.
The same thing happened in the May 1997 election, which saw GBP lose 285 pips against USD on the day of the election before regaining 0.52% of its value the following month.
More recently, in the 2017 snap election, the pound fell in value against the dollar on the day of the election and continued to fall for a few days afterwards. However, GBP had recovered to pre-election levels against USD within a month.
Volatility in the forex market is common, especially when dealing the major pairs. Before taking a forex position during a general election, you should take steps to manage your risk.
Top shares to watch
The sectors that are usually most affected by a UK general election are banking, housing and building. That is not to say that other stocks won’t be affected, but it will depend on the proposed policies of each party. For example, if a party is seeking to nationalise the railways, it’s likely that railway stocks will be affected in the run-up to the election, and if that party gets into power.
Banking stocks are popular around elections because of the effect that each political party can have on the finance sector. Generally, market participants will go long if they feel that pro-business or economically responsible parties will win; or they will go short if they think the opposite.
Popular banking stocks to watch around an election include:
Housing or building stocks are also popular around election times if either political party has made a policy commitment to expand housing developments or has stated it will make greater investments in infrastructure in the UK. Popular housing and building stocks to watch around an election include:
Latest general election news
-
Macro Intelligence: defensive sectors outperform as tariff fears reshape markets
2025-04-09T03:51:55+0100
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