Conservative win could 'further sterling's gains'

A Conservative win in the forthcoming general election could lead to "further gains" in sterling.

David Page, an economist at Investec Securities, has predicted that a "Tory majority at the next election…could push sterling towards the 84 pence mark [against the euro]".

He added: "Then we would expect to see a continued gentle appreciation across 2011 as well. That is very much based on the fact that, at these levels, sterling is very competitive against the euro."

Mr Page's comments follow the announcement that gross domestic product in the UK grew by 0.1 per cent in the fourth quarter of 2009.

While this means that the UK has officially left the recession, the news saw sterling plummet as it was lower than the 0.4 per cent growth that was predicted.

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Posted by Thomas Smith