THE MOST hotly-contested General Election in decades prompted City workers to stay glued to their terminals last night, with many still at their desks this morning.
Traders strived to remain more eagle-eyed than bleary-eyed, watching over markets in case of sudden movements sparked by the race for Downing Street. The scope for market jolts was laid bare soon after 10pm, when sterling jumped one per cent on the back of an astonishing exit poll that showed the Tories winning 316 seats.
Staff worked through the night at Lloyds, Barclays, Deutsche Bank, BNP Paribas, and numerous other financial organisations.
Some companies brought in extra staff to cope. “We’ve got a few more people on the desks in London in case the pound starts to tank,” said City Index strategist Joshua Raymond.
“If you trade any position involving the pound you’ve got a special interest in this election.”
Markets had been relatively calm in the weeks leading up to yesterday’s crunch poll, yet worries over sterling in particular spiked as millions of Britons cast their votes.
The cost of protection against swings in the pound rocketed to its highest level since 2010.
Some analysts believe that sterling benefits from a positive result for the Conservatives, with the pound likely to drop if Labour performs well.
Economists from UBS and Panmure Gordon said last week that quantitative easing from central banks was likely to protect stocks from any impact from the UK’s political uncertainty – yet foreign exchange traders are having to remain more alert.
“I’ll go home on Thursday during the day and get some sleep, then come in for the night and try to stay awake,” Morgan Stanley’s head of European FX strategy, Ian Stannard, told Reuters.
Other workers said they were heading home for some much-needed rest last night, before returning to the office for sunrise.
“I’m getting an early night and then going in for 4am-5am once a good proportion of seats have been counted,” Joe Bond of Abshire-Smith told City A.M.
Staff at UBS and JP Morgan would be in before 6am, the banks said.
“There’s not much you can do staying up all night if you are in the gilts market but I would want to be there at the crack of dawn to see what sentiment is like,” said Panmure Gordon’s David Buik.
Julian Harris, Tim Wallace