Citi discusses the GBP outlook around the possible different outcome of the Dec-12 UK elections.
"An outright Conservative majority would likely see PM Johnson being able to pass his Brexit deal as the base case outcome before year-end (likely sterling bullish). PM Johnson has indicated that the UK Parliament will be summoned on December 17 if he wins a majority and the Queen's speech – which marks the formal start of a new government – will take place December 19. If it is a different government, then the Queen's speech is expected January. This means that hypothetically, a Brexit deal could pass the House of Commons before Christmas and well before the January 31 deadline.
But even the second most likely outcome is likely GBP positive – an economically constrained Labor + Lib-Dem + SNP supply & confidence agreement opens the door to a People’s Vote without No Deal on the ballot paper," Citi notes.
"A hung parliament on the other hand would likely be GBP bearish but looks highly unlikely if this week’s polling is on the mark," Citi adds.