- Labour on track for largest win ever
- SNP trounced in Scotland
- Reform wins four seats
11.52am: SNP down 38 seats
The Scottish National Party (SNP) has lost 38 seats in the general election so far, with one seat still to declare due to a recount.
Labour has made dramatic gains across the central belt, with most results showing a 20% vote swing from the SNP.
The Scottish Conservatives won five seats, down from six in 2019, but leader Douglas Ross failed to secure the Aberdeenshire North and Moray East seat.
First Minister of the SNP John Swinney called the result "very, very difficult and damaging".
"The Scottish National Party needs to be healed and it needs to heal its relationship with the people of Scotland, and I am absolutely committed to doing that," Swinney said.
A recount in Inverness, Skye, and West Ross-shire has been delayed due to a statistical discrepancy between verified and counted votes. The seat has seen a close contest between the SNP and the Scottish Liberal Democrats.
Labour has taken all six seats from the SNP in Glasgow.
10.35am: Labour win sends FTSE 250, housebuilders higher
While the post-election reaction among the FTSE 100 set has been rather muted, the mid-cap FTSE 250 index has made strong gains.
The index, which comprises the 101st to 350th largest UK-listed companies by market capitalisation, has added over 250 points, or around 1.2%, to hit 20,861.
Not a year-to-date high, but only 40 points off.
UK housebuilders, meanwhile, are swooning over Labour’s comprehensive trouncing of the incumbent Conservatives.
Housebuilders currently comprise four of the five top FTSE 100 risers, with Persimmon PLC (LSE:PSN) leading the charge by gaining more than 4%.
7.58am: British political landscape overhauled
There are no two ways about it- the election was a comprehensive defeat for the Conservatives, with the party losing 249 seats as vote counting draws to an end.
It puts the Tories on just 119 seats currently, with Labour claiming 410.
Nigel Farage has claimed a number of victories for his right-wing Reform Party, with Farage himself winning in Clacton.
Reform has won four seats, as has The Green Party of England and Wales, while the Liberal Democrats will remain the third-largest party in the UK with 68 seats.
John Swinney's Scottish National Party, which has faced mounting divisions over leadership and the Gender Recognition Reform Bill, has been pushed aside amid a surge in support for Labour in the country.
The pound gained against the US dollar and euro in today’s Asia trading window in a post-election boost.
Markets appeared bolstered by the prospect of stability with a clear Labour majority following a tumultuous period of leadership by the ousted Tories.
3.30pm: Markets likely already prepared for Labour win
Markets have seen the opinion polls and are likely to have already priced in a crushing Labour win, and so if we end up with a small majority this would "perhaps be the unexpected – and least-favoured – outcome from the narrow perspective of investment," says AJ Bell investment director Russ Mould.
If a hefty Labour majority is the outcome, "there should be a relatively muted response from the pound, Gilt market and stock market on 5 July (and beyond)", says Mould.
"Financial markets usually give their quickest and most visceral judgements on a country’s economic and political stability (or otherwise) via its currency and the rate of interest at which they charge it to borrow through the bond markets."
He notes that sterling collapsed in the wake of the Brexit vote in 2016 and has never recovered the ground it lost, while the surge in the yield on 10yr Gilt bonds in 2022 "told you all you needed to know" about the market's feelings about Trussonomics.
After the less than impressive performance of the Tories, investors "could be in the mood to take the Sir Kier Starmer-Angela Rayner-Rachel Reeves ticket with equanimity", he adds.
A study of all sixteen of the general elections since the inception of the FTSE All-Share in 1962 shows that the UK stock market is "by no means frightened of a change in government and it may even welcome it", he said, with a double-digit percentage gain in the first year after an election where a new PM is ushered in.
A small Labour majority which gives some potential influence to the fringes of the party "could be a concern" if it hobbles the government in the way fractious in-fighting has done to Conservative administrations since 2010, Mould says.
"It could also be seen as a concern if the left of party is emboldened, and able, to hold out for more aggressive tax-and-spend policies, or gives unionised labour a chance to make more strident pay demands.
"From the selfish perspective of markets, these could be seen as inflationary and also potentially damaging to Labour’s promises to borrow and spend in a responsible manner.
"In this case, bond yields could go up (and if they stay there, take mortgage rates and broader borrowing costs with them) to the detriment of the economy and the incoming Government’s ability to spend, given the higher interest bill, which is already expected to come to a very uncomfortable £89 billion in 2024-2025, according to the OBR.
"Sterling could get a boost from higher bond yields, as higher returns on bonds tend to attract cash, but a stronger pound would probably upset the FTSE 100, given its overseas earnings, and also crimp exports."
Labour has promised not to increase income tax, VAT, NI or corporation tax, although it has said nothing on income tax thresholds, so has "very few levers to pull, barring capital gains tax reform on private equity and a windfall tax on oil and gas".
11.25am: Election effects on the pound
Some thoughts from forex strategist Jane Foley at Rabobank, who notes the effect on the pound this week, which is up 0.14% this morning to $1.2757.
"Through most of this year the pound has clung on to the position as the second best performing G10 currency," she notes.
"This morning, GBP has crept into first place following the USD’s retreat with US yields."
The expected victory for Labour "could result in a relief rally for the pound with investors looking ahead to what they hope will be a period of calm UK politics", Foley says.
"That said, a super-majority could kindle fears that Labour’s left wing could be bolstered."
The Tory party has in recent days been warning its supporters about the possibility of a ‘super-majority’ for the Labour Party following the general election, which would imply no effective opposition in parliament.
Various UK opinion polls have indicated that Kier Starmer’s Labour Party could win a majority of over 200 parliamentary seats, which would be above the 179-seat majority won by Tony Blair in the 1997 election.
"Polling stations will close tonight at 10 pm and the results will trickle trough in the early hours of tomorrow. UK asset markets have been calm into this election given that polls have consistently indicated a strong lead for Labour and in view of the efforts of Starmer and his team to woo investors and move the party towards middle ground," says Foley.
If Labour does win - what would Keir Starmer's first few days and weeks in power actually involve?
Experts at the @instituteforgov share their insights...https://t.co/QmyLIA1MQs
— LabourList (@LabourList) July 4, 2024
11.10am: Reform to get 13 seats in parliament?
Reform UK is on track to win 13 MPs, one of the final polls this week from Survation has predicted, while the Tories are predicted to just edge out the Liberal Democrats as the official opposition, with 64 seats to 60 seats.
The right-wing upstart party is expected to pick up a number of traditional Tory votes from those angry at Sunak’s government, but thanks to a wide distribution of votes are thought unlikely to win many seats outright.
Survation revised up its seat-by-seat prediction for Reform from seven seats to 13, with 17% of the popular vote.
In its last survey of the campaign, Survation interviewed 1,679 British adults for its ‘last call’ between Monday and Wednesday this week.
Labour is predicted to win 475 seats by Survation, a bigger landslide for Labour than Tony Blair, though at a 37.6% share of the vote this is smaller than the 40% achieved by Jeremy Corbyn in 2017.
The Conservatives are projected to win 19.9%, the Liberal Democrats 12.1% and the Green Party 7.2% with three seats.
9.25am: Top Tories to be toppled?
With pollsters predicting a heavy defeat for the Conservatives, many top Tories, including those in seats previously considered safe, may get the boot.
Chancellor Jeremy Hunt, Justice Secretary Alex Chalk, and Leader of the House of Commons Penny Mordaunt are among the senior Conservatives in the most vulnerable positions, according to the Politicshome website, which has provided a timeline of expected vote timings for those staying up to watch the results come in.
At 10pm on election night, the BBC will release its famous mass 'exit poll' of voters as they leave polling stations, which has been highly accurate in recent years, apart from notable exceptions such as 1992.
Then votes from all 650 constituencies in England, Wales, Scotland and Northern Ireland will be counted overnight, with around two-thirds of results expected to come in between 3am and 5am on Friday morning - but some will be much earlier (including the race between Blyth & Ashington in Northumberland and Sunderland South to get theirs in before midnight) and some notable ones as we tick over into Friday morning.
12.15am: Basildon and Billericay, where Conservative Richard Holden is at risk against Labour's Alex Harrison.
2am: The Tories are expected to hold the seat of leadership hopeful Kemi Badenoch, North West Essex, "unless it’s shaping up to be truly a terrible night", says the Politico website, also flagging key seats the party needs to hold of Castle Point, Rayleigh and Wickford, Sussex Weald, and Stratford-on-Avon.
Hertsmere is an interesting one, where a star of the 'Gogglebox' TV show is standing for Labour looking to unseat deputy PM Oliver Dowden.
2.30am: Rochdale, where George Galloway of the Workers Party defends his seat against Labour's Paul Waugh.
3am: Islington North, where Jeremy Corbyn fights as an independent and is running behind Labour in polls. Other notable seats include Cheltenham (Tory Alex Chalk vs Lib Dems), Forest of Dean (former chief whip Mark Harper vs Labour), and Portsmouth North (Penny Mordaunt vs Labour).
3.15am: Bristol Central, where Green Party co-leader Carla Denyer challenges Labour front-bencher Thangam Debbonaire.
3.30am: Key Tory losses might include Jeremy Hunt (Godalming and Ash), Gillian Keegan (Chichester), Grant Shapps (Welwyn Hatfield), and Esther McVey (Tatton).
4am: Reform UK's Nigel Farage (Clacton) and Richard Tice (Boston and Skegness) challenge Tory candidates. Other notable seats include Central Devon (Mel Stride vs. Labour) and Waveney Valley (Green Party target).
4.30am: Jacob Rees-Mogg (Somerset North East & Hanham) and David Davies (Monmouthshire) are likely to lose to Labour. Brighton Pavilion's result will indicate Green Party's standing.
5am: Potential Labour gains from Tories include Victoria Prentis (Banbury) and Liam Fox (North Somerset). Herefordshire North is another Green Party target.
5.30am: South West Norfolk, where former PM Liz Truss may lose to Labour.
6am: Wycombe, where Northern Ireland sec and Cabinet Office minister Steve Baker is expected to lose to Labour.
No need to guess who I voted for ????
The energy in Bristol today is electric! On the short walk to the polling station, I met 8 Green volunteers and heard 'well done' and 'I voted for you' from voters ????
Thank you, everyone, and remember to bring ID to vote! pic.twitter.com/rE8v5eRdgX
— Carla Denyer (@carla_denyer) July 4, 2024
7.55am: Polls open
Brits up and down the country will head to polling stations today between 7am and 10pm to place their vote in the first general election since the pandemic.
Nearly all polls are pointing to a Labour majority, but the question looms over whether the Tories will be the official opposition and whether it will be a historic landslide victory for Starmer's party.
YouGov posted its final poll yesterday revealing that Labour would take 431 seats, while the Conservatives are expected to win 102, followed by the Lib Dems with 72.
Should these polls be correct, it would represent the largest majority in Labour history and the worst-ever result for the Tories, with cabinet members and high-ranking MPs projected to lose seats.
Meanwhile, Focal Data has predicted Labour will win 444 seats, giving it s historic majority of 238 - the largest ever.
Elsewhere, More in Common has forecast a 210 majority for Starmer, giving Labour one seat more than the record 209 won by Stanley Baldwin's Tory party in 1924.
#DogsAtPollingStations #DougsAtPollingStations pic.twitter.com/nmqfXq2ENR
— TechnicallyRon (On all the platforms) (@TechnicallyRon) July 4, 2024
Wednesday, 3.50pm: £15bn tax raid by Labour forecast by Citi
US bank Citi has predicted Labour will launch a £15bn tax raid on pensions, capital gains and inheritance this autumn to meet demands for higher spending.
Benjamin Nabarro, its chief UK economist, said Labour would ultimately tax and spend more than the current baseline and that low growth in the UK economy had become entrenched.
Slashing reliefs on pension contributions, inheritance tax and capital gains were easy targets and could raise £8bn a year.
Nabarro said: “We therefore expect some further tightening in the autumn".
2.59pm: What can the winning party expect from the economy?
With a Labour victory tomorrow extremely likely, analysts at Deutsche Bank have turned to look at what the new government can expect from the economy.
Regardless of the election outcome, the next government will likely benefit from an economic boost, says the German bank, as the UK is out of recession and the economy is stronger than anticipated.
GDP growth is expected to remain robust at around 0.4% quarter-on-quarter, aligning with the UK's trend growth rate.
Strong household balance sheets, with real disposable incomes projected to grow by 3% due to tax cuts and slowing inflation, with business investments catching up, are key factors.
The next government will also inherit stronger fundamentals, says the bank, with healthy household balance sheets and a household savings rate of 11.1%, indicating potential future consumption growth.
Households and corporates have significant cash excess savings, amounting to approximately £170 billion and £58 billion, respectively.
However, significant challenges remain, says Deutsche Bank.
“Potential growth is lower than two decades ago, and living standards have stagnated since 2017.
“The new chancellor will face high public sector net debt, close to 100% of GDP, and a persistent productivity issue. “
1.57pm: Tory minister effectively concedes election
Comments from Conservative minister Mel Stride have added more pressure to the Tories' last day of campaigning after the Work and Pensions secretary said Labour was expected to have a large majority after tomorrow's vote.
Speaking on BBC Radio 4's Today programme, he said: " "I totally accept where the polls are at the moment means that tomorrow is likely to see the largest Labour landslide majority - the largest majority that this country has ever seen. Much bigger than 1997.
He then implored those to consider which party they would like to see as opposition to the government.
"I have accepted that where the polls are at the moment...that we are therefore tomorrow highly likely to be in a situation where [Labour has] the largest majority that any party has ever achieved."
Sunak played down his fellow party members comments, stating that he is "fighting hard for every vote".
"What Mel was doing was warning of what a very large Labour majority, unchecked, would mean for people," he said.
"So, everyone watching who thinks, 'oh, this is all a foregone conclusion', it's not."
1.40pm: Tory trouncing to stoke populism?
A Labour landslide victory might give a misleading view of the country’s mood, or that’s the view of Berenberg chief economist Holger Schmieding.
He suggests that the election is more about voting out the Conservatives, who have underdelivered since succumbing to populism under Boris Johnson and Liz Truss.
In his opinion, the precise result and Labour's policy tweaks are less significant than the broader political reaction.
“The key question is whether installing moderate Labour leader Keir Starmer signifies a move beyond populism or if radicals will soon dominate the political agenda again.”
Currently, the UK appears to have moved past populism, Schmieding says, with voters choosing between pragmatic Conservative leader Rishi Sunak and centrist Labour leader Starmer.
“However, given the significant rise in UK public debt, Starmer will face fiscal challenges. He has not made extensive promises, limiting potential disappointment and voter backlash.”
Polls show Labour with 40% support, the Conservatives with 20%, the Liberals with 12%, and the Reform party with 17%.
This could result in a significant Labour majority, with projections suggesting around 432 seats.
“While Labour may celebrate a landslide, the lack of a strong opposition could have downsides.
“A severe Conservative defeat might lead to a takeover by arch-Brexiteer Nigel Farage or similar figures, pushing the party further right.
“Farage’s populist views still resonate with a significant minority of voters, including former Labour supporters.
“An outsized Labour majority could also embolden the party’s left wing to push an expensive policy agenda, contrary to Starmer’s campaign moderation.“
This scenario could eventually lead to more radical or populist influences re-emerging in UK politics.
1.20pm: British stocks benefit from French uncertainty
British stocks are holding higher this afternoon and investors in the City believe part of the good performance could be driven by political turbulence in France.
Over the last couple of weeks, funds have flown into UK stocks as investors look to avoid the chaos caused by Macron's decision to call a snap election.
Isabel Albarran, investment officer at Close Brothers Asset Management, revealed there had been a sharp surge in demand for London-listed stocks, with global investors starting to increasingly view them as safe havens.
Uncertainty remains in France as it readies for its second round of voting, with the far-right National Rally set to face off against multiple allying left-wing parties.
Albarran said: “Sell-side firms we speak with have seen a steady pick-up in UK net inflows in the last month.
“One firm reported net inflows of c. $350m [£276m] last week, 20 times the net inflow of the week after the UK election announcement.”
12.36pm: Chances of Trump second term grow
Markets are betting that Biden won't win another term as president after his self-proclaimed loss in last week's live debate.
Odds for Biden to take office for a second term have dropped by 32% since the live debate, while bets on Trump have been on the rise, says political betting site PredicIt.
Biden claimed his poor performance was because of jet lag and said that he "wasn't very smart" for "travelling around the world a couple of times".
"I didn’t listen to my staff... and then I nearly fell asleep on stage,” he told reporters.
11.52am: Labour on track for historic win
Stocks in London are continuing to hold higher this morning as the country prepares to head to polling stations in what is expected to be a historic election for the Labour Party.
Latest polling figures from Survation revealed the left-wing party was on track to win by a landslide, in what would be its largest-ever majority.
Keir Starmer's party is predicted to win 484 of the 650 seats up for grabs, outperforming the 418 taken by former party leader Tony Blair in his historic win back in 1997.
The Conservatives, which have been in control for 14 years, are set to win just 64 seats, the lowest amount since it was created back in 1834, Survation revealed.
Meanwhile, Farage's Reform UK is set to take just seven seats, despite having grown in popularity since the election was called.
However, it will be the Liberal Democrats truly placing pressure on the Conservatives as the threat of them becoming the official opposition grows.
Survation predicts they will win 61 seats, with the SNP taking 10, while Plaid Cymru and the Green Party both win three.
11.09am: France can avoid far-right majority, says PM
Shares in France's leading index the CAC 40 have rallied 1.2% this morning after the country's current prime minister claimed his party may be able to block Marine Le Pen's far-right National Rally from taking power.
Gabriel Attal, a close ally of President Macron, said he thinks a cross-party alliance could help stop the far-right group from succeding power in the upcoming second round of elections.
Some 200 candidates across the political spectrum have pulled out of the election race in a bid to prevent National Rally from winning seats, clearing the path for whoever is most likely to beat them.
"What these withdrawals show is that we can avoid an absolute majority for the far right," Attal told France Inter radio.