What the General Election outcome will mean for the pound - and your travel money

As we head into the final week of campaigning, the Pound is currently trading at a 31-month high against the euro - here's what you need to know if you're about to swap your cash

It's been a turbulent period for the pound, with Brexit, a snap election and Boris controversy sending it spiraling.

But on Monday, sterling hit fresh highs as the UK’s general election campaign prepared to enter its final stretch.

Earlier today, the pound broke over €1.19 against the euro for the first time since May 2017. Against the US dollar, it struck $1.318 - its highest level in seven months.

But how will the outcome hit the pound and will it be good news for your wallet?

"Since the Brexit vote, the pound has been depressed by continued political uncertainty," Louis Bridger, at foreign currency provider ICE, said.

"The General Election is important for the strength of GBP because each party which will have different implications on Brexit."

Here are Louis's predictions.

A Tory win

Boris Johnson has promised to pass his Brexit deal and bring in a Budget within 100 days if he is elected Prime Minister.

If he is elected with a majority, this will likely fuel the pound’s recent gains by both increasing the possibility of the UK leaving the EU with a deal and by bringing some much-needed political certainty.

It’s worth being mindful that these gains might be short-lived, though. A Conservative majority could mean the UK has more chance of crashing out without a trade deal at the end of 2020, which would likely have a very negative impact on GBP.

Equally, if post-Brexit trade talks go on and on this will leave Britain with more uncertainty and probably prolonged ups and downs for sterling. 

A Labour majority

While Labour’s proposed economic policies have been welcomed by some; they have been widely criticised as being potentially damaging for the UK economy.

Because of this, there are fears that a Labour majority might cause a downturn for sterling.

On the other hand, any initial losses to the pound after a Labour win could arguably be offset by the fact that it is pledging a People’s Vote with the potential to overturn Brexit.

If Brexit was taken off the table, it’s likely we’d see huge gains for the pound. Since the referendum, the markets have generally reacted positively towards any suggestions that the UK could remain in the EU. It has, however, responded negatively to no-deal Brexit talks.

A hung parliament

If no party has a majority, the one with the most MPs can form a coalition - or partnership - with one or more other parties to gain control.

A hung parliament with either the Tories or Labour propped up by the Liberal Democrats, could result in big gains for sterling.

This is down to the fact that the Lib Dems would probably demand a People’s Vote in return for lending their support (although Jo Swinson has not publicly warmed to the idea) and any possibility that the UK might remain in the EU could be good news for the pound.

Another option is that the SNP would form a coalition government (unlikely with the Tories but could happen alongside Labour), which could potentially lead to further increased uncertainty.

Liberal Democrat majority

The Liberal Democrats are pledging to revoke Article 50 without a referendum, which could result in big gains for sterling if Brexit was called off. However, with odds of 1000/1, the chances of this are pretty much zero.

Should I buy my travel money now, or wait until after election day?

The pound is in a fairly strong position now, so if you’re happy with the rate, it’s probably a good idea to lock in a deal now.

Regardless of rate gains and losses, what will have the biggest impact on getting a good travel money deal is how you choose to exchange your money.

We've got a full guide on how to buy your travel money for the best price, here.