Hung parliament will not be a 'huge catastrophe', says expert

Date: 26th April 2010

British businesses should not be concerned at the prospect of a hung parliament as the result would not be a "huge catastrophe", according to one expert.

Michael Baxter, editor of investmentandbusinessnews.co.uk, said there has been no fall in the pound following Liberal Democrat leader Nick Clegg's successes in the recent TV debates.

The expert claimed that any damage that would be caused by a hung parliament has already been "allowed for" by the markets.

He commented: "The risk of a hung parliament is that the resulting government won't have the teeth to deal with the physical deficit, the markets will panic and the pound will fall in value forcing the rate of interest to go up.

"That's the risk but I'm not convinced that that risk is particularly high."

Mr Baxter's comments follow the publication of a report by the British Chambers of Commerce, which revealed that 65 per cent of UK businesses are "concerned" or "very concerned" about the prospect of a hung parliament.

The outcome of the general election will be announced after voters take to the polls on May 6th.

Posted by Emily Smith