Very surprisingly, PM Theresa May has announced she wants a snap election on 8 June
Due to the fixed-term elections system, PM May needs a two-thirds majority of the Commons to call for a snap election. Tomorrow PM May will move a motion in the House of Commons calling for a general election.
Based on the most recent opinion poll, the Conservative lead is +21pp over Labour. Due to the UK's 'first past the post' system, this means that the Conservatives will likely increase their majority lead in the Commons.
EUR/GBP could decline further in the very near term driven by short covering caused by higher uncertainty.
In our main scenario that May resumes negotiations EUR/GBP should be in for a level shift higher post a June election.
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