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Opinion | Tactical Voting Will Take The UK Into Hung Parliament Territory

This column does not necessarily reflect the opinion of the Benzinga editorial board.

Tactical voting is nothing new, but in the U.K., as the general election is about to take place in a few hours, it is becoming a significant move adopted by many frustrated remainers.

The result of this upcoming election is harder than most to predict, but one thing is clear; tactical voting is extremely high on the agenda for many voters, and a hung parliament is likely.

Many Brits are sick and tired of U.K. MPs discussing nothing but Brexit when there are other pressing issues.

The general sentiment being expressed by many Brits is frustration, “England is a total joke. We’re a laughing stock abroad!” said one female baker. And for many, this election could bring an end to this nonsense with another commenting, “We’ll carry on going around in circles without an election.”

To Brexit Or Not To Brexit, That Is The Question

Brexit continues to be a challenge for both the U.K. and the EU. The majority of British voters chose to leave the European Union on June 23, 2016. The original plan called for the U.K. to leave the EU on March 29, 2019. After delays, politicians were granted an initial extension of the Article 50 process that continued through April 12, 2019. EU leaders then backed a six-month extension until Oct. 31, 2019. Deadlines have passed, Prime Minister Theresa May was forced to resign, and the U.K. is still stuck in limbo.

So far, the three parties in the leading are the Conservative Party, followed closely by the Labour Party and the Liberal Democrats.

Voters will have to choose between Boris Johnson and Jeremy Corbyn. In his campaign, Johnson went as far as to create a cringeworthy “Love Actually” inspired video promising to deliver Brexit.

In contrast, Corbyn has made the decision to adopt a neutral stance and in the case of a Brexit referendum as "a sign of strength" and what he calls "maturity."

The Liberal Democrats are keen to stop Brexit and have launched their 2019 election manifesto, with the slogan Stop Brexit Build A Brighter Future.

Meanwhile, many currency traders are preparing for a busy 24 hours ahead. The general election will offer some ways to profit.

Richard Falkenhäll, senior FX strategist at SEB, highlights a number of scenarios for the pound related to Thursday’s General Election outcome.

He explains a Conservative majority to push EUR/GBP down towards 0.83, and a hung parliament to significantly depreciate sterling towards EUR/GBP 0.87-0.88.

Falkenhäll adds that a hung parliament would weaken the GBP.

“This sort of uncertain scenario without a clear leadership would increase the risk that the U.K. could crash out of the EU on 31 January, which is why this would trigger a significant weakening of the GBP initially. Although it is very bad for the GBP short-term, it might be a different and more positive long-term story if the UK is able to form a coalition, and the EU accepts an extension, which would make a second referendum an option. However, currently, this seems like a far-fetched alternative combined with a lot of ifs and buts,” adds Falkenhäll.

Meanwhile In Finland

Compared to U.K. politics, Finland is a total contrast. Sanna Marin, aged 34, has just been sworn into office on Tuesday, becoming the world’s youngest prime minister.

Marin is a refreshing change and has been dubbed a rising star in Finland’s Social Democratic Party since first entering Parliament in 2015.

In contrast, Finnish politics are not based on aggressive confrontation, uncertainty, lack of leadership, petty one-upmanship, and wishy-washy promises.

The U.K could learn a lot from the Finns.


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