Uncertainty over hung parliament's potential effect on sterling

A hung parliament would be bad news for both sterling and the stability of the financial markets.

In his column for MarketWatch, David Marsh this is a position being taken by the Conservatives.

Mr Marsh attempted to counter this view by arguing that the pound will remain one of the world's stronger currencies over the next six months, unlike the euro which has started falling in value.

The latest round of opinion polls suggests that no party will secure an outright majority at the general election on May 6th.

Mr Marsh said that no party having an absolute majority may actually be beneficial to the economy.

"Coalition governments can be effective, as has happened in the past in the UK, just as the one-party administrations favoured by the British first-past-the-post election system can lead to economically disastrous outcomes," he explained.

The last time a hung parliament occurred was in 1974 and questions remain over the effect it may have on the country's economy.

Posted by Sarah Pitton

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