Hung parliament fears weigh on sterling

The likelihood of a hung parliament has once again pushed currency exchange into the centre of debate.

Both the Daily Telegraph and the Financial Times have commented on sterling's value today (March 3rd) as the polls show a hung parliament is looking 'probable'.

Conducted by Charter 2010, the surveys show that the Conservatives held a strong lead towards the beginning of February.

But a month on and things are looking less certain.

The Telegraph reported that analysts are worried about a hung parliament result because they "fear it will result in political deadlock and therefore an insufficient response to the deficit".

However, according the Financial Times, there are other reasons to be taken into account when looking at sterling's performance in the currency exchange markets.

The paper reported that Prudential's plans to buy into AIG's Asian operations will also push the British currency down.

Sterling is currently trading at $1.50 at 10:30GMT.

Posted by Thomas Smith

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