Markets should relax over hung parliament says Economist Intelligence Unit

By Jonathan Bartley
April 23, 2010

Markets should take the prospect of a hung parliament in their stride, Charles Jenkins and Neil Prothero from the Economist Intelligence Unit have said.

With the Conservative Party leader David Cameron warning that business confidence could be harmed by a hung parliament, the EIU thinks that nevertheless politicians may be forced to work together.

Their comments came after last night's second prime ministerial debate, in which David Cameron changed his tone, saying he would work with other parties in the event of a hung, or 'balanced', parliament.

You can see their comments here:

It comes after Moody’s Investor Service, which provides ratings for government debt, said that a coalition government could prove a “positive” because it would mean a more complete mandate for public sector austerity.

“We do not think that a hung parliament will have a direct impact on the the UK credit rating,” said Arnaud Marès, the lead analyst for the UK at Moody’s. “If you had a fiscal plan agreed by a coalition, that could actually be quite positive, because it would imply broad popular support.”

The reassurances come after David Cameron, Ken Clarke and George Osborne all sought to drum up fears of dire economic consequences if the Tories do not win a majority in the election.

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