UK: sterling surges on Johnson election hopes

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Meeting and greeting in a north-of-England factory ...

Boris Johnson was on pre-election walkabout on Thursday (December 5).

While markets were betting his Conservative Party will win next week's national election.

That thought is driving sterling up.

Thursday saw a 2 and-a-half-year high versus the euro ...

Against the dollar, it's still far off the 1-71 level hit in mid 2014.

But at 1-31, it's gained more than 7 per cent since October.

As for the Conservatives, they made headlines on Thursday by announcing an end-of-January deadline for completing Brexit ...

And a February budget.

With a strong lead in opinion polls - double digits in many cases - they're expected to gain a majority in parliament.

Though UK polls have form on getting it wrong - says analyst Jeremy Batstone-Carr.

SOUNDBITE (English) JEREMY BATSTONE-CARR, PROFESSOR OF GLOBAL FINANCE, UWE, SAYING:

"Pollsters struggle with 'don't knows': those people who say they are going to vote but haven't yet made up their minds as to who they are actually going to vote for. That therefore raises the risk of another hung parliament and having to go through all this again."

If that doesn't happen, economists increasingly think it could break Britain's Brexit deadlock.

In a Reuters survey, most see a Conservative majority government eventually agreeing a free trade deal with the EU.

The probability of a disorderly Brexit - now down to 15 per cent.

That's the joint lowest level since the survey began over two years ago.

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