UK stocks rose and sterling inched higher on Friday in a muted market reaction to the Labour party securing a resounding and long-predicted general election victory, with investors hoping the new government will usher in a period of relative political and economic stability.
The FTSE 100 was up 0.4 per cent in early trading, while the pound was up 0.1 per cent against the dollar at $1.2771. Government bond prices also rose, pushing the yield on benchmark 10-year gilts down 0.02 percentage points. With most results declared, Labour had won 410 House of Commons seats out of 650. The Conservative party dropped to 119.
The moves come after investors had been gradually turning more positive on sterling in recent weeks, with the currency rising 0.4 per cent against the dollar and 0.5 per cent against the euro since Rishi Sunak called the election on May 22.