General Election Campaign Enters Second Week Ahead of 12 December

Xe Corporate Europe

November 11, 2019 4 min read

It is the UK elections which dominate the headlines this morning. Tory MP Sajid Javid has said over the weekend that Labour spending plans would cost an eye watering £1.2 trillion over five years – a figure comprised of a planned increase in spending directly from a document produced by them and then included around £590m of pledges made publicly since then. There appear to be a number of assumptions made by inference from past documents Labour has produced (this may not necessarily be the case as their final budget plans are not yet released).

These so called ‘reckless’ plans would alone be enough to put Britain into an economic crisis ‘within months, not years.’ Even though this was later described as ‘fake news’ by the Labour counterparty John McDonnel it was the denationalisation plans of the railways, postal service and energy which could have the most costly effect. The conservative party continue to maintain a lead in the opinion polls released over the weekend.

In other news the UK sovereign credit rating has cut to a negative outlook by Moody’s on the basis that “Brexit-era policymaking process has illustrated how the capability and predictability that has traditionally distinguished the U.K.’s institutional framework has diminished.” This may come as a surprise as we haven’t seen a downgrade in the UK credit rating by a major company since 2017. However, Moody’s had their reasons as they later added “the decline in institutional strength appears to Moody’s to be structural in nature and likely to survive Brexit given the deep divisions within society and the country’s political landscape.”

Data to look out for today is the UK GDP figures which are expected to be up 0.3% compared to the previous quarter. However, should this come lower than expected or even negative (which would mean we are in a technical recession) we can expect to see increased volatility between GBPUSD with a move below 1.2760, the three-week low. The main focus will continue to be on the UK elections in the start of December with any volatility being short lived.


The greenback found some strength towards the end of last week with some progress made in the US-China trade relations. News from an official from the China’s Ministry of Commerce stated that both parties were discussing a roll back on tariffs implemented on each other which could occur before “phase one” of the trade deal is signed. Since then Trump has made it clear "I haven't agreed to anything. China would like to get somewhat of a rollback, not a complete rollback because they know I won't do it." Despite the lack of clarity, we are a stage where both parties want a deal to be resolved soon.

At the time of writing:

GBPUSD - Trading below 1.28 at 1.2799

GBPEUR - Trading above 1.16 at 1.1610

EURUSD - Trading below 1.11 at 1.1023

Special Notes: The figures are based on the live mid-market rates, correct as of 08:30 GMT on 11/11/2019, and are provided for indicative purposes only. Live mid-market rates are not available to consumers and are for informational purposes only. The rates we quote for money transfer can be selected via the page on our website ‘Live Money Transfer rates’.

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