Thursday's UK elections expected to bring political change. Similar developments in both 1997 and 2010 weighed on the pound. History points to a significant easing in pound volatility across the board. Recent FTSE 100 performance matches the 2015 pre-election moves. General election in sight The UK general election will be held this Thursday, July 4, the day that the US will be celebrating its 248thanniversary from the adoption of the Declaration of Independence.
For example, Brent oil prices tend to drop both on the day of the elections and on the following day as the markets are still digesting the outcome. More importantly, market changes one week after the election give the strongest signals. As seen in chart 1 below, in both 1997 and 2010, the pound underperformed against both the US dollar and the euro, while the FTSE 100 index jumped by around 3%.