Closed Election: Traders race to protect against potential drop in UK pound — as it happened


Live coverage of UK election campaign.

Welcome back: three days to go

UK politicians start their final week of campaigning before voters go to the polls on Thursday, with Conservative leader Boris Johnson heading for Labour leave heartlands in the northeast of England and shadow chancellor John McDonnell preparing a speech in which he will declare an end to austerity should Labour win.

Please join us as we update the blog with the day’s political events.

What the papers say

The centre-left Guardian says Jeremy Corbyn’s Labour party is in a last-ditch drive to focus on voters’ finances, while the Times points to Johnson’s “blitz” in the Labour heartlands in the northeast of England over the final 72 hours of campaigning:

The front page of the Daily Express says it’s the last chance to save Brexit and Britain and the Daily Telegraph quotes Mr Johnson saying that Mr Corbyn will betray Brexit.

The Financial Times writes that Mr Johnson, with weekend polls giving the prime minister a steady lead of about 10 per cent, has used one of the final days of campaigning to outline plans for a points-based immigration system.

NHS watch: The left-leaning tabloid the Mirror splashes on a four-year-old being treated on the floor at a National Health Service hospital because there are not enough beds while the i says the NHS waiting times ordeal for patients is being ‘covered up’.


Sterling rallies to highest level since April

The pound rose in early London trading to its highest level since early April with Boris Johnson holding a strong lead in election polling.

Sterling was recently up 0.25 per cent on the US dollar, hitting a high of $1.318. It rose by a similar margin against the euro, with one pound buying 1.1902 units of the common currency.

Sterling has rallied 10 per cent against the buck since falling below $1.20 in early September, when concerns over a potentially chaotic no-deal Brexit were swirling.

Mr Johnson enters the final week of the election campaign with a 10-point lead on his rival Jeremy Corbyn, according to the latest FT poll tracker. The consistent gap has been a boon to the pound since many analysts and investors reckon if the Tories can seal a majority, it would help ease political uncertainty that has gripped the UK.

“Most election watchers expect the Conservatives to come away with a workable majority in Parliament, which would set the stage for a likely swift Brexit resolution early next year as well as more expansionary fiscal policy,” analysts at Goldman Sachs said.

Economists are mixed on the broader economic effects of the election result, with some projecting a Tory majority would help boost the economy and others expecting a more tepid performance or potentially a recession. Chris Giles has written an excellent read on the subject.

Election polls in the past have, of course, been terribly wrong. So some traders are expecting turbulence on election night this Thursday if things do not play out as expected. More on that topic in the FT’s Market Questions.

McDonnell defends Labour’s economic plans

John McDonnell defended Labour’s economic and taxation plans to John Caldwell, the billionaire mobile phones entrepreneur who co-founded Phones 4u, in a joint interview on Radio 4′s Today programme.

The shadow chancellor said:

We want to put in fair taxation that provides us with the building block in which we can invest in our public services. It is about making sure that small businesses are supported so they can scale up. That is the whole thrust of our economic strategy.

It is based upon hard-nosed discussions that we have had – with the Institute of Directors, the CBI, the Federation of Small Businesses, Make UK, the Chambers of Commerce. And most of them welcome those investments.

Rhetoric around taxation in some of our actually so exaggerated it is beyond the reality of what we are doing. If people just look at our proposals I think they are fairly balanced.

Sunak says UK and EU have agreed Northern Ireland timeline

George Parker reports:

Rishi Sunak, Treasury chief secretary, said Britain had agreed with the EU a timeline for implementing the new Northern Ireland arrangements, adding: “I’ve actually been incredibly impressed by all the preparations that have gone on.”

Mr Sunak, speaking on the BBC’s Today programme, said that Northern Ireland would have “unfettered access” to the rest of the UK market.

His comments come after the FT revealed a Department for Exiting the EU document had warned that implementing Mr Johnson’s Brexit deal, which would see Northern Ireland remain part of the EU customs code, presents a “major” challenge.

The document also raised the possible “legal and political (domestic and EU) impact of not being able to deliver the protocol in Dec 2020” — a reference to the protocol covering Northern Ireland signed by Mr Johnson with the other 27 EU member states last October to secure an exit deal.

Arlene Foster, leader of Northern Ireland’s DUP, said that HMRC officials had told her that there would be checks on trade moving from GB to NI.

Ms Foster said that would be “totally unacceptable”, telling the BBC: “You can’t leave part of the UK in a worse off position and have checks between different parts of the UK.”

Shadow chancellor to set out a Labour government’s first 100 days

John McDonnell will use a speech in London this morning to set out what a Labour government would do in its first 100 days, writes Jim Pickard.

Much of this will be familiar from our Financial Times interview with the shadow chancellor last week. Early priorities for Labour include ending austerity and nationalising the water and energy industries.

Labour would set up a National Transformation Unit and kickstart a National Investment Bank, regional development banks and a Post Bank.

Here’s a reminder of the FT interview from four days ago: John McDonnell: Labour will govern alone in a hung parliament

Johnson takes a whirlwind tour of England in final push

The prime minister in the final three days before polling day will be visiting every region in England and Wales, as he works to secure a Conservative majority on December 12, writes Jim Pickard.

Boris Johnson’s tour will include visits to north Wales, west Yorkshire, Cheshire, Leicestershire, East Anglia and the south-west.

On Monday he will spend the day visiting four Brexit-voting Labour seats across Humber and the north-east as he emphasises that the only way to “get Brexit done” is to elect a Conservative majority government.

He will end the day in the south-west, where he will warn that a vote for the Liberal Democrats is a vote for further paralysis and delay – and a Corbyn government.

With nine more seats needed to secure a working majority, the prime minister will be campaigning right up to the wire.

It is closer than many people think – if the Scottish National party and Liberal Democrats win six more seats each, Jeremy Corbyn will become prime minister.

Johnson to refer to the roar from Sunderland

Boris Johnson is expected to tell Sunderland today:

It’s now been 1,264 days since Sunderland’s roar was heard on the night of June 23 2016.

1,264 days in which parliament should have delivered what you voted for, taken us out of the EU, and addressed all the reasons you voted so decisively for change.

You voted to leave the EU because you wanted to stop sending the EU money we could spend at home, to end uncontrolled and unlimited immigration from the EU, to take back control from an unelected elite in Brussels – and to force politicians in Westminster to listen to you, not just London and the South East.

Instead we have had 1,264 days of dither and delay, prevarication and procrastination, obfuscation and obstruction.

Parliament has bent every rule and broken every convention as it has delayed, diluted and denied Brexit. Remain MPs who said at the last election they would deliver Brexit shamefully did the exact opposite when they got to Westminster.

As reported by Jim Pickard

Johnson’s fishy tale

Campaigning has drawn Boris Johnson to the Grimsby fish market, the focal point for the local industry and one of the most important in Europe, and a morning trying to understand the power of cod.

Great Grimsby in the northeast of England voted more than 71 per cent in favour of leaving the EU in the 2016 referendum. It has been a Labour stronghold since 1945 but, going into this week’s election, a mere 2,500 votes separate the two main parties.

The industry may only account for a tiny part of the UK economy but its resentment against EU membership has struck a chord among many voters. It is hard to think of many sectors that will be more heavily affected by Brexit.

For nearly 50 years, the Common Fisheries Policy has dictated where UK fishing boats can operate and how much they can catch. It has given EU nations access to British territorial waters. 

Mr Johnson looks uncomfortable as he gets his hands on a piece of cod but he well understands that it is worth grasping the chance to try and tip the scales in his favour.

Voters hunker down on Brexit stance

People identify a lot more strongly with how they voted in the Brexit referendum than with any political party – and the strength of this feeling is increasing – according to a study by the Policy Institute at King’s College London.

According to KCL research into how polarising the current campaign is, the proportion of people who identify very strongly with their side of the Brexit debate has increased significantly since 2018.

As much as 55 per cent of people say they are a “very strong” Remainer or Leaver, up from 44 per cent in 2018. This is more than double the 22 per cent of people that say they are a “very strong” supporter of their party.

The researchers said the increased identification with the extreme ends of the Brexit spectrum may be due to the focus that has been placed on the UK’s EU exit – notably by the Conservatives – during the election campaign.

Swinson defends Lib Dem stance on revoking Article 50

Liberal Democrat leader Jo Swinson refused to apologise for being “ambitious and bold” as she was again forced to bat away criticism of the party’s pledge to scrap Brexit if elected.

The Lib Dems have taken a staunchly pro-Remain position ahead of Thursday’s vote, shifting from their initial position of calling for a second referendum to saying they would revoke Article 50 and cancel Brexit if they won a majority.

Speaking this morning on BBC Radio 5, Ms Swinson said that, while it was now “less likely” that she would become prime minister, the position the party had taken made sense based on polling ahead of the campaign.

“When we started the campaign we had four political parties who were similar-ish in the polls,” she said. “We saw the polling that showed that in that scenario, where you have a first past the post voting system, it’s very difficult to predict what will happen.”

But she said the time for conducting a post mortem on the strategy would be after the election.

There’s certainly a time to review what happens in the election campaign and I think the best time to do that is not three days before election day.

Why Tory defector Sam Gyimah is running for the Lib Dems

On the campaign trail in Kensington, former Conservative minister Sam Gyimah tells FT political correspondent Laura Hughes why politics has changed and says it’s now time to “stop the madness”.

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McDonnell says Labour policies costed, practical and deliverable

John McDonnell is speaking in London on the South Bank, insisting that Labour’s policies are fully costed, practical and deliverable, reports Jim Pickard.

The shadow chancellor says he has detailed plans that would be issued to civil servants on Friday in the event of a victory.

So let me be crystal clear about this: we’re setting our sights higher than any opposition party has ever done before. And we’re doing that because we have to.

The shadow chancellor says Labour intends to remake the government by creating new institutions and taking utilities into state ownership.

He would hold his first Budget on February 5 and will introduce a £10 minimum wage, a pay rise for public sector workers, more money for the National Health Service and the scrapping of the universal credit.

Because the scale of the challenge is greater than ever. To rebuild the shattered communities and public services from the wreckage which the Conservatives and Liberal Democrats have created over the past 10 years.

While at the same time we’ve got no time to lose. If we are going to stop the climate emergency becoming something even worse, any future general election will be too late. We need to start this week, and we need to start together.

McDonnell does not rule out becoming interim leader if Tories win

This from the FT’s Jim Pickard, who has been listening to John McDonnell’s speech in London’s South Bank:

I just asked John McDonnell about a Sunday Times story that he would become interim leader — at the behest of his party’s national executive committee (NEC) — if the Tories win on Thursday.

He strikingly didn’t rule it out:

“It’s not going to happen because we’ll be having a majority Labour government.”

Also when asked if he could work with Northern Ireland’s Democratic Unionist party, he repeated his line about Labour being determined to govern alone if necessary as a minority government.

But he said he couldn’t see the DUP voting against key policies such as more money for public services and a higher minimum wage.

Investors hedge their bets following sterling’s rapid rise

Investors are scrambling to protect themselves from a fall in the pound during the final week of the election campaign.

All the polls suggest Boris Johnson is on course to return to Downing Street with a majority after Thursday’s vote. In the spot currency markets, traders are pricing in the result.

Sterling has rallied more than 2 per cent since the start of December, and touched its highest levels against the dollar since April on Monday morning at $1.3180.

But deep in the plumbing of the $6.6tn a day foreign exchange market, one indicator to show stress is the difference between the cost of buying downside and upside protection for the pound over the next week.

The gap, known as the one-week risk reversal, showed a 2.5 percentage point difference in implied volatility between buying downside and upside insurance on sterling, its highest level of the year.

The market pricing suggests investors believe the risk of a slump in sterling is much greater than a bounce.

As if to reinforce the caution, there has also been a surge in the cost of buying insurance against wild swings in the currency. Implied volatility for one-week options contracts climbed to over 18 per cent for sterling against the dollar, nearing its highest levels of the year.

Focaldata poll puts Tories on track for 40-seat majority

George Parker reports:

A new mega-poll has predicted the Conservatives are heading for a 40-seat Commons majority in Thursday’s election but that tactical voting by people wanting to stop Brexit could deprive Boris Johnson of victory.

The study for Best for Britain by Focaldata, using the MRP technique to estimate opinion in each constituency, concluded that the Tories would win 345 seats, while a combination of Labour, SNP, Lib Dems, Greens and Plaid would together win only 286 seats.

Best for Britain, a campaign against Brexit, and the People’s Vote campaign have issued tactical voting advice for pro-EU voters, claiming it would take only 40,704 tactical votes to prevent a Tory win. It has identified the 36 marginal seats where it is most likely to be effective.

Speaking at a launch of the tactical voting advice, Best for Britain’s chief executive Naomi Smith admitted that Labour and the Liberal Democrats had failed to get their act together to marshall the strength of the anti-Brexit vote.

She said the Lib Dems “made a mistake” by advocating a policy of revoking Article 50 of the Brexit process when they were riding high in the polls and that “very public squabbling” between Lib Dem leader Jo Swinson and Labour’s Jeremy Corbyn hadn’t helped.

Stuart Hand, head of People’s Vote, insisted his campaign had mobilised tens of thousands of volunteers to help candidates backing a second EU referendum, in spite of the chaos and infighting at the top of the organisation in recent weeks. “People on the ground have got on with it,” he said.

Political leaders’ communication is worse than their predecessors

The candidates vying for the keys to Number 10 are a lot poorer at communicating than their predecessors, research has found.

A report by communication analytics group Gweek suggests a marked decline in “speech intelligence” among prime ministers over the past 40 years, with Boris Johnson a less effective communicator than all of his predecessors since Margaret Thatcher.

“What we’re seeing in the data is that over time leaders are coming across as less authentic when they speak to the nation, which is a huge contributing factor to being able to land ideas and messages when speaking to the public,” said James Bryce, chief executive of Gweek.

The findings indicate the public today has to cut through more words and fewer ideas per minute than previously. The leaders of the three main parties in the current election all score at the bottom end of the scale, while Thatcher and John Major come out on top.

The analysis found Mr Johnson’s speech is strewn with “disfluencies”, which include stutters and overly stretched words. He uses more so-called “filler words” such as “umm” and “ahh” than all previous prime ministers – at an average of 21 per minute, compared to 3 per minute in the case of Thatcher.

Tory priorities more prominent than Labour’s in TV coverage

Laura Hughes reports:

Loughborough University has some interesting figures out today after weeks of monitoring how the media’s coverage of the election campaign has played out.

The researchers conclude that the Conservative party’s top two themes of Brexit and taxation have received 24.5 per cent of the overall coverage and 29.8 per cent of broadcast.

The issues of health and the environment, Labour’s top two themes, have appeared in 14.1 per cent of the overall coverage and 13.4 per cent of broadcast TV.

Their analysis concludes:

There may be a variety of reasons for this imbalance – not least the fact that one of the reasons this election was called was to ask voters a clear mandate on the Brexit deal negotiated by the government.

But coverage of Brexit has declined slightly in recent days, as our latest report suggests, so there is clearly room for the agendas to develop further in the final week of the campaign.

Thus far, though, the broadcast news landscape has provided better opportunities for Boris Johnson to fight the campaign on the terrain he and his party have chosen.

DUP on track to hold Dodds’ Belfast north seat, poll shows

Arthur Beesley reports from Dublin:

The Democratic Unionists are on course to narrowly hold Nigel Dodds’ key Belfast north seat, according to a poll that suggests the party will lose one seat and win another to retain 10 House of Commons seats in the election on Thursday.

The survey for LucidTalk, a Belfast pollster, suggests Irish nationalist Sinn Féin party will drop one seat to finish with six seats. The moderate nationalist Social Democratic & Labour Party is forecast to make a Westminster comeback with two seats after a wipeout in 2017. Both Sinn Féin and the SDLP oppose Brexit but the smaller party would take up House of Commons seats as it does not agree with Sinn Féin’s abstentionist policy.

The poll, carried out on November 27-30, provides the most detailed assessment of Northern Irish trends in the election. But the projections come with a health warning as polling in closely fought seats such as Belfast north and Foyle in Londonderry, also known as Derry, is within the margin of error. Days before voters go to the polls, LucidTalk on Sunday said as many as 10 per cent were still undecided.

Mr Dodds, deputy leader of the pro-Brexit DUP, is at the centre of the party’s campaign in Westminster against Boris Johnson’s new EU withdrawal treaty on grounds that it creates an Irish sea border on trade between Northern Ireland and Great Britain. He is in a tough contest in Belfast north against John Finucane, the Sinn Féin lord mayor of Belfast, but LucidTalk said the DUP man is likely to hold the seat. “Belfast North turns out to still be a DUP hold according to the forecast … though it is by a very narrow margin within the seat predictor model, and within the models margin of error.”

Less than a quarter of Tory interviewees have been women

Six of the 27 Conservative politicians most used for big broadcast interviews during the election campaign have been women, reports Laura Hughes.

For Labour, that figure is 14, a study shows. The top nine Tories most interviewed on television and radio during the campaign have been men, with Nicky Morgan coming in at 10 with seven appearances. She is not standing for re-election in Thursday’s general election. The top four for the Labour party are men with the following six most interviewed being women, the analysis reveals.

Here is the analysis by Redbox from the Times @timesredbox @MattChorley:

Johnson takes reporter’s phone when pressed on NHS

A bizarre video has surfaced in which prime minister Boris Johnson pocketed a reporter’s phone when he was pressed on the National Health Service.

Joe Pike, a political reporter for ITV, was questioning Mr Johnson when “the PM grabbed my phone and put it in his pocket”.

Mr Pike was asking Mr Johnson to look at a photo of a child who was admitted to Leeds hospital with suspected pneumonia. The photo, which accompanies an article in the Yorkshire Evening Post, showed the child laying on a pile of coats due to a lack of beds.

Mr Johnson initially attempted to stick to his talking points until Mr Pike pushed him on the matter. The prime minister finally said:

It’s a terrible terrible photo and I apologise to the family and all those who have terrible experiences in the NHS.

Labour candidate Angela Rayner immediately seized on the interview, saying on Twitter:

Utter disgrace, Boris Johnson grabs Journalists mobile and puts it in his pocket when confronted about the little 4 year old boy with suspected pneumonia forced to lie on pile of coats on floor of Leeds hospital. Do you really want this man running the country for next 5 years?

At the end of the interview, Mr Johnson apologises for taking Mr Pike’s phone.

Johnson questions BBC licence fee as way to fund media

Boris Johnson on the campaign trail in Sunderland has questioned the viability of the BBC’s annual licence fee.

Here’s what he said:

You have to question whether that way of funding media still makes sense… how long can you justify a system where everyone who has a TV has to pay?

As reported by Jim Pickard

Sterling’s room for manoeuvre

With traders increasingly confident of a Conservative win on Thursday, the pound has rallied to highs not seen since April.

It is currently sitting at $1.3147 against the dollar and £0.8422 against the euro.

But where is it likely to go from here?

The feeling is that a Tory majority – as the polls are suggesting will be the case – would allow Boris Johnson to push his withdrawal deal through parliament, clearing the way for a quick Brexit resolution early next year as well as more expansionary fiscal policy. That would be positive for sterling.

“The UK election should be a non-event and sterling is likely to see a phase of consolidation without much consequence,” said Sebastien Galy, an analyst at Nordea Asset Management.

Analysts at Goldman Sachs reckon a Tory majority would push the pound to £0.82 against the euro and $1.35 against the pound – representing gains of around 2 per cent.

Similarly, Barclays analysts see gains of up to 1.5 per cent if there is a clear Tory majority, but said if Boris Johnson’s party was not decisively ahead by 3am on Friday, a hung parliament would become a likely outcome – something that “would catch markets completely by surprise”.

What if Boris Johnson wins big?

Boris Johnson could well win a working majority in the House of Commons on Thursday. If so, writes James Blitz, FT Whitehall editor, the critical question on the night will be: how big? 

A small Conservative majority, anything up to 20, would clearly be an improvement on the situation that faced Theresa May in the last parliament. But a modest victory would still leave doubts about whether there will be a smooth Brexit process in 2020.

If the majority is at these low levels, Mr Johnson will be unable to ignore the Brexit hardliners in the Conservative European Research Group. The ERG will insist that he abides by his pledge that a free trade agreement between the UK and EU must be concluded by December next year.

Many experts believe that getting a free trade agreement with the EU in a year is impossible and so the UK could still end 2020 by crashing out of the bloc.

However, if Mr Johnson wins a much bigger majority — say in the 40s or 50s — then that would give him considerably more scope in three ways.

First, he would be able to ignore the ERG more easily over Brexit policy. He would be in a better place to accept the need for an extension to the standstill transition up to the end of 2022, perhaps. That would come as a relief to sterling investors.

Second, he will have more flexibility in the FTA negotiation itself. If Mr Johnson wins a large majority he will have the scope to accept more EU regulation in return for frictionless access to EU markets.

Third, a big majority will give him more chance to shift his party towards one nation policies, on public spending and infrastructure investment, that place the Conservative party closer to the centre ground.

Of course, all this is accompanied by a huge caveat. Thursday may yet bring a hung parliament in which the deadlock in parliament will linger on. But a big Conservative win, if it happens, would give Mr Johnson the authority to remake his party altogether. 

For more on this, read James’s Brexit Briefing here

Rise in postal voting throws up new questions

The FT’s Chris Tighe writes:

One of the trickiest questions candidates may face on the doorstop is not a political one – it’s being asked for help by voters struggling to understand the instructions on their postal ballot forms.

The Electoral Commission, the independent body set up by Parliament to set standards for how elections should be run, has proposed that campaigners should not, by law, be allowed to handle postal ballots.

The Commission’s current official position is that handling ballot forms is not recommended – but not that it is illegal.

However, given the sensitivity of any allegations of fraud or malpractice, candidates are generally very anxious not to stray into this grey area.

With voting by post an increasing trend in general elections – 18 per cent of the UK’s 46.8m registered voters chose this method in 2017 – it is certain that among their number will be many elderly people tussling with some ballot paper origami as they try to follow the instructions on folding, sealing down and putting one envelope into another.

Many clearly do manage; the 2017 “turnout” for postal ballots was 85.1 per cent, against 65.9 per cent in person.

Proxy voting, for people who for various reasons are not able to vote themselves, is also increasing but is much less common. In 2017, 283,928 electors appointed a proxy . This was 0.6% of the electorate, up from 0.3% in 2015.

NHS an uncomfortable topic for the Tories today

The Conservative party has scrambled to stem some of the damage from Boris Johnson’s uncomfortable TV interview over the NHS.

Interviewed by ITV, the prime minister refused to look at a photo of a young child called Jack who the Daily Mirror has reported was forced to sleep on a hospital floor despite suffering from suspected pneumonia. Mr Johnson took the reporter’s phone rather than engage on the issue.

Matt Hancock, the health secretary, spoke to Jack’s mother on Monday afternoon on the phone during a visit to Leeds hospital.

Here are the thoughts of the FT’s UK political commentator Robert Shrimsley:

Sterling update

The pound has given up some of this morning’s gains but is still trading higher for the day against the US dollar.

Sterling was recently 0.1 per cent higher at $1.3150, having reached an earlier high of $1.3180.

The currency’s moves closely mirror the fortune’s of Boris Johnson’s Conservative party, and there are few signs of opinion polls closing during the election campaign’s final days.

Still, Mr Johnson has had a difficult day. Some commentators have suggested his NHS interview gaffe could be one of this campaign’s very few moments to cut-through the noise.

The FT’s Robert Shrimsley has tweeted:

You never know but if Boris Johnson is going to have a campaign moment, his reaction to the boy with pneumonia on the floor of a hospital could be it.

That’s all for now

We are going to close down the rolling coverage, and will be back tomorrow morning.

Today’s biggest story has been the NHS. Boris Johnson has been criticised for a lack of “empathy” after he refused to look at the photo of a child forced to lie on a pile of coats due to a lack of beds in an NHS hospital.

You can read our latest report on that story, from Laura Hughes, here.