Much has been made of the risks to the markets, economy and Sterling should the outcome of the election be a hung parliament. Will it really matter?
The arguments in favour of a hung parliament playing havoc with the markets are pretty strong.
Should one party be unable to secure a majority and form a government, economists fear that decisive action to tackle the deficit and national debt could not be taken. With measures to cut the debt seemingly deferred until after the election, this could be a very real problem.
The argument against a hung parliament destroying the British economy are also rather compelling.
It seems like that the Liberal Democrats would hold the balance of power in such an event, and their own approach to dealing with the debt has been credible. Writing in the Independent today, David Prosser claims such an outcome could result in a road map to dealing with the debt emerging more not less quickly.
Whilst the arguments are there on both sides, most financial services practitioners believe the UK economy will suffer if the general election results in a hung parliament.
A survey by the Chartered Institute for Securities & Investment found that 21% suggested that having no single political party with an overall majority would plunge the country into a prolonged recession. A further 59% thought that the impact would be to delay economic recovery.
Over the coming weeks, we will all be keeping a close eye on the likely and actual outcome of the election and the impact this has on the markets.
