Article / 27 April 2015 at 9:00 GMT

#Election2015: Britain votes on its future

Former managing editor, TradingFloor.com / Saxo Bank
Denmark
  • UK goes to the ballot box on May 7 for most pivotal vote in a generation
  • Hung parliament likely with any number of parties potentially holding the balance
  • Conservatives/Labour both hoping to score outright majority
  • Cable likely to be hugely volatile through and past the election date
  • See our dedicated #Election2015 page on TradingFloor.com for more
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 For a man rather more noted for his right-wing stance, UKIP's Nigel Farage 
is likely to have a firm interest in the centre ground on May 8. Photo: iStock

By Martin O'Rourke

Elections come and go in the UK and they always command attention. 

But there is something about this one that looks set to make it the most pivotal since Tony Blair and the Labour Party swept to victory on a wave of enthusiasm in 1997 to send the Conservative Party into seeming oblivion after 18 long years in charge.

Of course, we all know how that ended. Britpop came and went, politicians and popstars mingled, brutal and quite probably unwarranted military campaigns in Afghanistan and Iraq were embarked upon, and the collapse of Lehman Brothers in the autumn of 2008 ushered in the global financial crisis that we're still struggling to emerge from.

Labour paid the price for that in 2010 and has since been trying to reposition itself but a freshly scrubbed Ed Milliband doesn't seem quite able to shake the bad smell that lingers.

Too tight

The polls can't call it. After a somewhat unconvincing campaign highlighted by David Cameron's ducking of a one-to-one leaders debate, the latest poll (YouGov, April 25) has Labour ahead by two percentage points on 34% with the Conservatives on 32%. 

UKIP, the Liberal Democrats and the Green Party respectively are on 14%, 9% and 6%.

Another poll Saturday (Survation) has the Conservatives leading at 33% and Labour trailing at 30%. The cumulative total of the next three parties meanwhile is 31%.

As things stand, the prospect of an outright majority for either of the two major parties looks non-existent. 

The Scottish National Party led by an impressive Nicola Sturgeon looks set to sweep the board north of the border giving her enormous sway as to who walks across the threshhold on May 8. David Cameron may have thought Scottish independence was off the agenda for a generation after last year's rejection of secession, but Sturgeon will give that short shrift.

Nick Clegg and Nigel Farage too will hope to leverage a hung parliament to their advantage with the latter potentially having a huge say in the future direction of the UK and even a possible Brexit, if his anti-EU party can make a decisive breakthrough at the polls.

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 It was all grins and backslapping five years ago for coalition partners David
Cameron and Nick Clegg but will either be smiling on May 8? Photo: iStock

Volatility and markets

Of course, it's only to be expected that markets will be very volatile in and around May 7 and Saxo Bank chief economist Steen Jakobsen will be giving his macro view on various outcomes.

Cable's trajectory too is likely to oscillate wildly as each market-moving item of news hits the wires. Head of forex John J Hardy will be delving into Cable's trajectory tomorrow on any number of outcomes for GBPUSD.

Saxo Bank's head of equities Peter Garnry will also try and assess what might happen to indices and the banking sector Wednesday. 

Thursday, meanwhile, sees head of commodities strategy, Ole Hansen, looking at the potential impact on North Sea oil of different outcomes and we'll also be taking a look at how to play the FX Options market with volatility almost certain to pick up for one-week GBPUSD ahead of the election.

With plenty more to come up to and including May 8, we'll have all you need to know when it comes to playing the markets covered on our dedicated #Election2015 page so keep it here for the duration. It's where the smart money stays!

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 The North Sea oil sector faces any number of scenarios that could make or break the
industry after May 7, especially with oil prices still uncomfortably low. Photo: istock

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Do you have a view on the upcoming election? Who do you think is going to win?
Is a hung parliament a bad outcome for business and Cable? Tell us what you
think in the comments box below or on our dedicated
#Election2015 page



Martin O'Rourke is managing editor of TradingFloor.com

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