An unconventional outcome for UK elections might not be GBP negative for the long-term, but further losses might be seen in the pound into the election risk, views the Research Team at KBC Bank. “EUR/GBP was locked in a sideways range in the 0.7150/0.7400 area. The negative impact of election uncertainty on sterling even eased of late. However, the poor manufacturing PMI spoiled the game for the UK currency.” “This week, uncertainty on the outcome of the elections and on the eco data will probably keep sterling in the defensive.” “That said, we are not convinced that an ‘unconventional’ outcome of the elections and coalition government should be a long term negative for sterling, as long as the economic recovery remains on track. However, further volatility/sterling losses might be on the card in the run-up to the election.”