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Election uncertainty hits pound
Since the beginning of 2010, the pound has fallen sharply against the dollar, dropping to its lowest level since May 2009. Sterling has also plunged against the euro, to its lowest level since last November.
With a surprise, sudden narrowing in the option polls - the latest YouGov
poll showed the Conservatives with just a two point lead over Labour - fear
of a hung parliament has increased, and is likely to send the pound tumbling
further in the coming weeks.
The prospect of no one party having a clear majority in the House of Commons
has led to fears of deadlock and delay in tackling the UK's record debt
problems. Concern surrounds the ability of such an administration to make
the cuts required to tackle the public deficit, which could result in the
loss of the UK's AAA sovereign credit rating.
This would lead to a loss of foreign investment, an increase in the cost of
borrowing and, potentially, a debt crisis.
