Sterling looks weaker after election

FOLLOWING weeks of anticipation, we now finally know the result of the British general election. Labour and Prime Minister Blair have won a record third term of office; however, an electorate apparently angry with the government’s support for the war in Iraq substantially reduced Labour’s majority.

In the last British parliamentary session, Labour held a 161-seat majority in Westminster, yet as we go to print, it seems that the government’s majority in the next parliament will be closer to 65. So what will be the likely market impact of Labour’s return?

It’s important to note that we’re entering unchartered waters here; we have no real historical precedent to base arguments on. So the arguments I outline below are nothing more than my personal view.