Hung Parliament leaves markets dangling

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.
 
“With the economy still in a very precarious state and a mountain of public debt to be tackled, businesses owners need our elected representatives to move away from inter-party point-scoring and show political responsibility.”

Richard Lambert, CBI director-general, said: “Business needs stability and wants to see a clear decision reached swiftly, which delivers a stable new Government. The UK’s route to economic recovery needs to be firmly established.

“The markets have been expecting this outcome, but uncertainty brings risks. The next few days will be critical.”