May 6, 2010
Today is the UK’s election, and polls continue to point towards a hung parliament in Europe’s third largest economy, and it looks all the more chaotic after today’s stark review of UK finances from the EU. The pound will surely rattle during the day tomorrow, and rock as we get the first returns from the country’s polls around 5PM EST. Be sure to follow our coverage as returns come in at Business Insider.
Currently, there are some prognosticators suggesting the Conservative Party is likely to get an outright victory, which would result in a strengthening for the pound.
The consensus, however, remains that the hung parliament will produce a coalition, either between the Labour Party and the Liberal Democrats, or the Lib Dems and the Conservatives.
Due to a common belief in progressive policies, the Liberal Democrats are likely to partner with Labour in a coalition government. Whether Gordon Brown would remain PM in such an agreement or not is up for debate, but it seems the Lib Dems would likely not want to be smeared with his already less than illustrious status.
The result of a Liberal Democrat – Labour coalition would be a new Prime Minister, perhaps Labour foreign secretary David Milliband, and Nick Clegg, among other Lib Dems, gaining a place in the cabinet. The pound is likely to fall against the dollar in such a scenario, as markets have much more confidence in the Conservatives’ intentions.
This article was posted: Thursday, May 6, 2010 at 4:22 am