UK elections unlikely to be positive for sterling – RBS

FXStreet (Barcelona) - Ross Walker, Senior UK Economist at RBS, expects the coming UK elections to be potentially toxic on the back of far-from-robust UK economic fundamentals, further suggesting that the elections are unlikely to be sterling asset class positive.

Key Quotes

“The UK's two-party dominated system is under unprecedented strain. 2010 yielded a coalition; 2015 is likely to further diminish the main parties' electoral mandates. Exactly what fills this void remains to be seen, but it seems unlikely to be sterling asset class positive. None of this might matter too much if the UK's economic fundamentals were more robust, but the forbidding fiscal backdrop – and the politically unpalatable action this requires – makes the 2015 election potentially toxic.”