The pound has remained stable against the US dollar following the revelation that the Labour Party is poised for a landslide victory.

The exit poll confirmed traders' expectations of a forthcoming period of political stability.

Sterling held steady against the US dollar, maintaining around 1.276, and against the euro at 1.18, after polling stations closed at 10pm.

A significant Labour majority had been widely anticipated and priced into financial markets, resulting in a muted reaction for the pound.

Currency movements typically reflect the immediate response from financial markets to events that could influence the political and economic landscape.

Chris Beauchamp, chief market analyst at trading platform IG, stated: “The exit poll has caused little volatility in foreign exchange markets, as the predicted Labour landslide is confirmed.

“The stability that would come from such a win means investors can temporarily set aside concerns about UK political risk.”

Economists at Investec Economics noted that a substantial Labour majority had been “well anticipated” by numerous opinion polls since the election was called, leading to the pound showing “virtually no reaction”.

“What will be more significant to markets is the Labour government's actions once in office,” Investec added.

Labour is set to have a prime minister in No 10 for the first time since 2010.

Rob Wood, chief UK economist at Pantheon Macroeconomics, commented: “If the final results align with the exit poll, Keir Starmer would have a sufficient majority to implement a stable policy agenda, potentially boosting business investment and attracting more foreign investment.”

However, he warned that increased government spending and borrowing could delay Bank of England policymakers in reducing UK interest rates.

Meanwhile, experts indicated that traders are likely to shift their focus to the second round of the French elections, which have had a more significant impact on European financial markets in recent weeks.

France will hold its general election on Sunday, following a surprising first round where the far-right National Rally received the most votes.

“The recent rebound in the euro and stock markets suggests that investors are confident the National Rally will be kept out of power,” said Fawad Razaqzada, a market analyst at Forex.com.