The pound was steady after an exit poll indicated the U.K.’s Labour Party will secure its long-predicted landslide election victory, with Keir Starmer set to become Prime Minister on a pledge of greater economic stability.

The currency was little changed around $1.276, with markets hoping a tumultuous period in British politics is over. The official election exit poll predicted Labour will win 410 of the 650 seats in the House of Commons, the most since Tony Blair’s 1997 landslide.

Heading into the vote, investors were betting that a victory for Starmer’s center-left platform would mean an end to policy-induced market meltdowns. While Labour’s historic support for higher taxes and trade unions has traditionally put it at odds with markets, this time traders are confident that the specter of the U.K.’s gilt crisis two years ago will keep the next government in check.

“For the first time in years the U.K. will be a relative island of political stability and this will favor moderating risk premia and asset market discounts,” Evercore ISI’s Krishna Guha and Marco Casiraghi wrote in a note.

U.K. stock futures start trading at 1 a.m. on Friday, while government bonds open at 8 a.m. in London.

According to the poll, Prime Minister Rishi Sunak’s Tories are projected to be reduced to 131 seats, compared with 365 in 2019, a result that would likely see some of the party’s biggest names voted out. The Liberal Democrats are on course for 61, with Nigel Farage’s Reform U.K. on 13.

The exit poll is based on a mass survey of tens of thousands of people after they cast their ballots. That has generally made it more accurate in predicting the outcome of U.K. elections than snapshot surveys of voters’ intentions conducted during the campaign.

A large victory for the Labour party “should imply an underlying bid tone for sterling,” said Neil Jones, a foreign-exchange salesperson to financial institutions at TJM Europe.

Before the vote, Labour placed economic stability at the top of its manifesto and pledged to stick to tough spending rules. Rachel Reeves — an ex-Bank of England staffer who’s set to become the U.K.’s finance minister — said that the administration would not raise three of the U.K.’s key taxes on wages and goods.

Other promises included building more houses, creating a publicly-owned energy company and moving to “reset the relationship” with the E.U. — though Labour’s manifesto also ruled out a return to the single market or customs union.

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