The pound sterling has strengthened ahead of the UK election, but its future fate will depend on whether investors find the new government's plans to revive the British economy viable, Reuters reports.

If Labor, leading in the polls, wins on July 4, the new government will have to win investor confidence by addressing the accumulated economic problems. Britain's public debt relative to GDP has hit a 63-year high and foreign direct investment inflows have fallen in four of the past five trimesters, the portal notes.

"Less policy certainty will significantly weaken the pound and make it more volatile", said Costas Milas, professor of finance at the University of Liverpool. And according to Simon Harvey of Monex Europe, currency traders are positive about the pound's prospects in the short term, as the UK government's fiscal position leaves little room for Labor to overspend.