With only a few weeks to go to the U.K. general election, polls show the race between the main parties is too close to call — and that means likely volatility for the pound. Here’s what market-watchers have to say about what might happen with a win for the Conservatives.

Analysts say an outright victory for the right-leaning Conservative Party is surrounded with concerns about “Brexit”, or an U.K. exit from the European Union. And it’s the prospect of that exit that could drive the pound GBPUSD, +0.21% down in the aftermath of the vote.

Conservative leader David Cameron has pledged to hold an “in or out” referendum by 2017 on the issue, should his party win. That would mean two years of not knowing whether the U.K. will retain its level of access to European markets — or even longer, depending on how exit negotiations go with EU members.

In the run-up to the election, sterling has already seen some pressure from fears of a “Brexit”, said Kathleen Brooks, research director at Forex.com. “But it’s still mind-bogglingly unclear what that would mean for the U.K., and it’s going to be difficult to price in until it arrives,” she noted.

In one worst-case scenario, the U.K.’s GDP could be 2.2% lower in 2030 if Britain leaves the EU and doesn’t reach trade deals within the EU, independent think-tank Open Europe has calculated.

“The market will have to balance between wanting the Conservatives because they like their economic policy, against not liking their policy on Europe”, Brooks said.

There’s a general perception that markets tend to favor conservative governments, as they are seen as being more business-friendly. Plus, since the Conservative-led coalition government took power in 2010, the U.K. economy has been moving quite well — it grew 2.8% in 2014, the fastest among Group of 7 developed nations.

Conservative victory a win?

Angus Campbell, senior analyst at FxPro, believes a Conservative majority win is “highly unlikely”. If it does happen, then EU exit worries could push the pound back to the $1.42-$1.43 level, he says. He sees that same level for a Conservative-led coalition, too.

But Craig Erlam, senior market analyst at Oanda, suggests the pound — currently at $1.49 — will be oversold on the uncertainty around the vote. An outright victory for the Conservatives would provide clarity and give a follow-on lift to the currency, he says.

“I think we would see a positive response in the pound — at least, in the short term leading into the medium-term,” Erlam said. “[We’d] probably see the pound rally back above into the $1.50s or even into the $1.60s.”

Find out what analysts have to say about the different outcomes:

Return of coalition may be an elixir for the pound

U.K. election could spell rough times for sterling

Labour win likely to give sterling a boost