FTSE 100 edges lower as pound extends gains on prospect of Tory majority
The pound has climbed to its highest level against the euro since May 2017, driven by hopes of the Conservative Party winning a majority in the upcoming election, dragging the FTSE 100 lower in the process.
The pound soared to its highest level against the euro since May 2017 on Thursday, driven by hopes of the Conservative Party securing a majority in the upcoming election. However, sterling’s gains have helped to drag the FTSE 100 lower.
GBP/EUR rose to €1.18384 on Thursday, with Willem Klijnstra, currency analyst at Legal & General Investment Management telling the Financial Times that an election win for the Tories is ‘baked in' to sterling’s valuation.
‘A Tory-led government is baked in today. The tail risk is that doesn’t happen,’ Klijnstra said. ‘If we do get a Conservative win then we are straight back to Brexit.’
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FTSE 100 edges lower after pound surges
The blue-chip index traded down slightly on Thursday morning, with less than a week to go until the UK general election on 12 December.
The FTSE 100 is down 0.24% to 7171 as of 10:25 GMT, with the investment manager M&G among the biggest fallers, sliding 3.4% to 216p a share.
The steel manufacturer and mining company Evraz, along with packaging company DS Smith, have also helped dragged the index lower, with the pair sliding 3.4% and 2.8% respectively.
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