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How to interpret the exit poll results

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK

326 is the make or break number to look for in the general election exit poll — but beware, the 10pm estimate is not always 100% right.

326 marks the minimum number of seats any party needs to win in parliament to form a government.

The exit poll, released at 10pm on Thursday, predicted the Conservative Party will end up with 368 seats. Labour are on track for 191, the Scottish National Party (SNP) are on for 55, and the Liberal Democrats on 13.

A voter passes an advertising board featuring an image of the Democratic Unionist Party's (DUP) deputy leader Nigel Dodds, as she leaves from a polling station in Belfast, Northern Ireland, as Britain holds a general election on December 12, 2019. (Photo by Paul Faith / AFP) (Photo by PAUL FAITH/AFP via Getty Images)
A voter passes an advertising board featuring an image of the Democratic Unionist Party's (DUP) deputy leader Nigel Dodds. Photo: PAUL FAITH/AFP via Getty Images

The survey is closely watched as an indication for the final result of the general election and is generally a solid indicator of the largest party in parliament.

Exit polls are based on surveys of voters on election night as they come out of polling stations. Surveyors stand outside specifically selected polling stations across the country, meant to give a representative picture of how the country is voting overall.

READ MORE: General election 2019 exit poll shows huge Conservative win

Historically, the exit poll has proved a very accurate indicator of the final result. The worst margin of error was in 2015 when the exit poll was out by 15 results. Then, it predicted a hung parliament but the Conservatives ended up with a majority.

Ahead of the exit poll results, Jordan Rochester, a foreign exchange strategist at Nomura, said that anywhere between 315 and 326 seats forecast for the Conservatives would likely mean another Tory coalition with the DUP.

Rochester said the pound (GBPUSD=X) could fall as much as 1.5% if the exit poll forecasts in this range, as traders fear the possible margin of error and general uncertainty.

However, the pound surged 2% after Thursday’s exit poll was released. A Tory victory is seen as removing immediate uncertainty around Brexit, paving the way for the UK to leave the EU at the end of January and move on to trade negotiations.

“While this is only a poll and not the actual result it would take an unprecedented swing for this to not lead to a Conservative majority,” said David Cheetham, chief market analyst at trading platform XTB.