UK Post Election Coalition Could be Good For Business

With a coalition government looking highly likely after the U.K.’s general election Thursday, an alliance of diverse political parties in one government might not be as bad for the business world as people think.

A day before the election, opinion polls indicate that the incumbent Prime Minister David Cameron, head of the Conservative party, is neck and neck in the polls with opposition Labour leader Ed Miliband.

If neither party gains a majority of the 650 seats up for grabs, a “hung parliament” occurs, prompting fraught negotiations as the parties try to establish alliances to work together in government.

Read MoreWhy politics in Britain is about to change forever
But an unusual alliance might not be a bad thing, according to one top political analyst.

“Maybe a hung parliament with no strong majority for any party is not, necessarily, so bad for business because it reins in the more extreme impulses of either party and provides the gridlock that Wall Street likes to see,” Tina Fordham, chief global political analyst at Citi, told CNBC Wednesday.

“What is really fascinating about this election and the way the polls are playing out is that nothing has moved the needle in terms of support for the parties. Not the debates, not the campaigns, not the manifestos,” she said, adding that this was due to the parties narrowing their policies.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza