Pound to ‘falter’ on hung parliament

Sterling will “falter” and UK shares and gilts would likely rise if Thursday’s UK general election returns a hung parliament, a leading London economics firm has predicted.

Capital Economics said a hung parliament would weigh on sterling because it assesses “there isn’t much to choose between the Conservative Party and the main opposition Labour Party when it comes to their views on the UK’s departure from the EU”.

Sterling firmed in the immediate aftermath of the call by UK prime minister Theresa May of a snap election, but had recently weakened against the euro, to 87p as opinion polls suggested a tightening race.