Watch Live: UK Election Results – Exit Polls Signals “Catastrophic” Hung Parliament, Pound Plunges

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The Polls heading in showed Labor gaining on the Conservatives…

And the bookies had Tories winning with between 358 and 363 seats (They need 326 to govern)

And before we start there is this…

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A reminder of 2015's UK election results

  • Con 36.9% (330)
  • Lab 30.4% (232)
  • UKIP 12.7% (1)
  • LD 7.9% (8)
  • SNP 4.7% (56)
  • GP 3.8% (1)
  • Plaid 0.6% (3)

But after seven weeks, and three terror attacks, the campaigns are over, the vote is in, and the results are coming in…

The Exit Polls

UK exit poll projects COnservatives are the largest party but fall short of majority – leaving a hung parliament.

  • Conservative 314 – 12 seats short of majority
  • Labour 266
  • SNP 34
  • Lib Dem 14
  • Plaid 3
  • Green 1
  • UKIP 0
  • Other 18

Cable plunged…

 

  • FORMER UK FINANCE MINISTER OSBORNE SAYS EXIT POLL IS "COMPLETELY CATASTROPHIC" FOR MAY AND HER CONSERVATIVE PARTY – ITV
 

Right now, markets are debating the following two scenario risks outlined by CitiFX Strategy:

Hung Parliament – This is what exit polls suggest. CitiFX Strategy has said that a weaker Conservative showing than 2015 would be a big surprise given the polling gap and the expectation that UKIP voters would move to Conservative. As much would considerably complicate Brexit negotiations. This was the most GBP negative scenario in our view.

 

Small majority (Unchanged or just slightly larger) would be a big blow to Theresa May but may still not totally derail Brexit negotiations. It does however temper optimism that negotiations will go smoothly. Arguably this scenario makes bigger changes in the Cabinet less likely. GBP negative.

We still have another exit poll and of course, the real vote. CitiFX Strategy says that if this proves correct, we do expect GBP to have more downside from here. At least another big figure below.

NOTE: Historically these forecasts have been very accurate (within 15 seats for the winning party) but this means that if the exit poll projections are tight – i.e. within a 20 seat majority for the Tories – the margin of error means we may not know by 10pm which of the potential outcomes across small Conservative majority, Conservative minority or Labour coalition are the most likely.

So what happens next?

The vote count begins at 10pm with the first results typically declared between 11pm and midnight.

The bulk of the declarations begin to flow in from about 2am. By around 4am we should have ~50% of the vote counts declared and a good idea of the result and by 6am close to 90% of the vote count (see chart below).

In the case of a clear majority for the winner, the tradition is for the leader of the winning party to wait for the leader of the losing Party to concede before claiming victory. In 2015, David Cameron accepted victory just before 6 am.

As usual, Houghton and Sunderland South will be the first to reveal their results (around 6pmET), and the direction in which Labour's 13,000 majority goes could be an early indication of how Labour will fare nationally.

What to expect for the rest of the night…

8pmET – The first marginal result is due

It is thought that Nuneaton will be the first marginal seat to declare. Conservative Marcus Jones is defending a majority of 4,882 and Labour needs a 5.4 per cent swing to win.

830pmET – Tory targets in Darlington and Wales

If the Tories win in Darlington in Labour's heartland of north-east England, they are on course for a very good night.

The Conservatives have their first chance to win a Welsh seat in Wrexham.

9pmET – Labour targets in England and a Tory target in Wales

Labour is hoping to win in Bury North in Greater Manchester, Peterborough and Thurrock. Meanwhile the Tories want to snatch Clwyd Sout in Wales.

Home Secretary Amber Rudd's Hastings and Rye seat would fall to Labour on a 4.8 per cent swing.

930pmET – Will Jeremy Corbyn be re-elected? 

Jeremy Corbyn is expected to be re-elected with a big margin in his constituency of Islington North.

Labour hopes to make gains from the Conservatives in Vale of Clwyd and Warwickshire North.

There will be a fight between Labour, Plaid Cymru and the Conservatives for the currently Labour seat of Ynys Mon.

10pmET – Results coming in thick and fast

The Liberal Democrats are hoping to take the Dunbartonshire East seat back from the SNP.

Tories their first chance of gaining from Labour in London with the marginal seats of Ealing Central and Acton and Hampstead and Kilburn

Ben Bradshaw is trying to cling on to his Exeter seat – one of Labour's few remaining seats in the South West.

The SNP's deputy leader Angus Robertson risks losing his Moray seat to the Conservatives.

Westmorland & Lonsdale: Tim Farron's seat is due to declare. The Lib Dem leader would lose to the Tories on a 9.3 per cent swing.

The General Election result will be called in the early hours of the morning – could we find out the winner sometime between 10pmET and 11pmET?

Here's when broadcasters, more or less, called the result in previous years:

  • 2015 – Tory majority – 5.44am (0044ET)
  • 2010 – Hung Parliament/Coalition – Six days later with the coalition agreement (12 May)
  • 2005 – Labour win – 4.20am (2320ET)
  • 2001 – Labour win – 1.31am (2031ET) – Blair made a speech saying they'd won so the BBC just went along with it.
  • 1997 – Labour landslide – 1.38am (2038ET)
  • 1987 – Tory win – 12:47am (1947ET)
  • 1992 – Tory majority – 2.19am (2119ET)

Scenarios

  • Most Likely: PM May to win a larger majority (50+) which would supposedly allow for a much more stable Brexit process, through consolidating power while also making her less vulnerable to remainers within her own party, while the risk of a ‘no deal’ is lower and in turn lead to a cleaner Brexit. This can also suggest that it would be easier for PM May to agree on a transitional deal with the EU, mitigating some of the negative economic effects, as the next election will not take place until May 2022.
    • Market Reaction: Initial spike in GBP, however given the rise in the currency since the announcement (1.2520 to 1.2900), this outcome has largely been priced in which could limit any move to the upside, consequently leading to a ‘buy the rumour, sell the fact price action. Stocks to watch: Centrica and SSE likely to take a hit if the Conservatives impose a cap on standard variable tariffs. As it stands, GBP/USD o/n vol is to reside around 29/120 pips.
  • Likely: The conservative party win a slim majority (5-10 more seats) or relatively unchanged from current. This could possibly lead to a less stable government, making Theresa May more vulnerable to Brexit hardliners within her own party, subsequently raising the possibility of a ‘no deal’.
    • Market Reaction: Risks are tilted to the downside and as such, this outcome would likely see GBP met with selling pressure, alongside a fall in UK Gilt yields as some suggest this risks a more confrontational approach to Brexit negotiations, subsequently increasing uncertainty.
  • Unlikely: Labour manage to pull a surprise and form a majority through a coalition with SNP and Lib Dem, this would undoubtedly complicate Brexit negotiations, with analysts at Danske Bank noting that this outcome could potentially lead to Brexit being cancelled altogether or sway to a softer Brexit.
    • Market Reaction: In an immediate reaction, GBP will likely drop off alongside equity markets as a whirlwind of uncertainty lingers over UK political front. Analysts at PIMCO state focus will shift towards a looser fiscal policy and an untested government. Stocks to look out for would be UK utilities (Severn Trent, Centrica, SSE, National Utilities and United Utilities) which would likely drop off amid Labour’s plans of nationalisation.

Looking far ahead, under the Act, the next general election is fixed to take place on 5 May 2022. This will change if two-thirds of MPs vote for an early election, or if the government loses a no confidence vote. It could also change if the Tories win and implement their manifesto pledge to renew the Fixed-Term Parliaments Act.

And finally, here are British cameramen desperately hoping to get a shot of the Russian agents who manipulated the British election…

via http://ift.tt/2rR6Qvp Tyler Durden

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