Markets react to hung parliament fears
THE financial markets reacted with uncertainty this morning to the prospect of a hung parliament.
With no party holding a clear majority at 8am the FTSE 100 opened down 85 points, or 1.6%, at 5,175. Sterling is also down against the euro and the dollar.
The City wanted to see a party emerge with a clear mandate to act quickly on public borrowing.
However, worldwide economic sentiment has also been dented by the continuing debt crisis in Greece and the potential impact of a weak eurozone. Stock markets around the world have slumped in the last 24 hours.
Meanwhile, the Forum of Private Business called on the main political parties to work together in the event of a hung parliament
Chief executive Phil Orford said: “I expect many smaller businesses will be disappointed that the election has resulted in a hung Parliament. However, the outcome can’t be changed so it is vital that the newly-elected MPs put aside party politics and work together to come up with a credible system of governance.
The Conservatives made gains across the West Midlands but failed to win target constituencies in Birmingham.
Birmingham Edgbaston and Redditch contained the biggest shocks of the night – and together illustrated the unpredictability of an extraordinary general election campaign.
In Edgbaston, Tory Deidre Alden was attempting to win back the traditionally blue seat from two-term Labour incumbent Gisela Stuart. The Conservatives were confident of success here, and even senior Labour figures in the city were privately admitting last week that they had all but given up hope of retaining one of Birmingham’s most affluent suburbs. However, after a recount it became clear that Mrs Alden had been roundly defeated and Ms Stuart had constrained the swing to the Tories to just 0.5%.
But in Redditch, a 9.3% swing from Labour to Conservative was more than enough to unseat former Home Secretary Jacqui Smith, whose political career was blighted by the controversy surrounding her expenses claim for pornographic films rented by her husband.
In Birmingham, Labour held all its existing seats, further handicapping the Conservatives’ attempt to reach the 326-seat tally they needed to win a majority on the House of Commons. Tory wins did stack up in Worcester, Tamworth, Dudley South, Cannock Chase and Nuneaton, but by this morning the most likely outcome appeared to be a hung parliament and an attempt by Labour to forge a deal with the LibDems to hold on to Downing Street.
Business leaders said the prospect of a hung Parliament was not in the best interests of the business community in the Midlands, while others feared the real needs of the region could be lost if the devolved areas were allowed to wield a disproportionate amount of influence in return for helping form a coalition Government.
James Watkins, executive director of Business Voice WM, said: “What West Midlands business needs now is a stable economy and a stable future. That means MPs cannot spend all their time squabbling in Westminster while businesses struggle to get on with the day job of securing employment and improving the bottom line.”
