Currency exchange rate drops following election

The currency exchange rate for sterling has fallen rapidly following today's announcement that the UK is facing a hung parliament.

Yesterday's (May 6th) general election failed to deliver a clear winner among the three main parties, resulting in political and economic uncertainty.

As a result of this, sterling fell against the euro and the dollar today.

Simon Derrick, chief currency strategist at Bank of New York Mellon Corp. in London, told Bloomberg: "Sterling is as clear a barometer as you can get about the need for a government with a clear mandate.

"It's that level of uncertainty that's weighing on sterling. The results have been so erratic it's difficult to get anything meaningful from them."

Concerns overshadowed continuing troubles in Greece which had previously held the euro down against sterling.

This morning (May 7th) sterling was down against the euro by 1.42 per cent and was trading at €1.15 at 08:30 BST.

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Posted by Sarah Pitton