Hung parliament 'would put economy at risk'

The UK economy would suffer greatly if the forthcoming general election results in a hung parliament, one expert has claimed.

Economist for Investec Securities David Page explained that a situation in which no party wins an outright majority ’would have a very bad effect on sterling’, which ’could get worse’ in the future.

A hung parliament would make it difficult for the government to make decisions on issues such as how to reduce the deficit in public spending, Mr Page said - something which is crucial to restoring ’a fiscal path to sustainability’.

Therefore, there would be a ’very real’ risk of the UK’s sovereign credit rating being downgraded, causing a significant softening in sterling - something that is unlikely to be welcomed by those involved with private wealth management.

The currency fell against its European and US counterparts yesterday (January 26th), after gross domestic product growth for the final quarter of 2009 was weaker than expected at 0.1 per cent.ADNFCR-2318-ID-19580877-ADNFCR