James Forsyth

Cause for concern

Cause for concern
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That Ipsos-Mori poll is still making waves, with both Steve Richards and Daniel Finkelstein devoting their columns to the prospects of a hung parliament. Steve is excited by the possibility, thinking that it would restore the Commons to its rightful place as the cockpit of the nation. Danny is concerned by it, fearful of the consitutional damage it could inflict. But it strikes me that the real reason to worry about a hung parliament is the financial markets. How would gilts traders react to a weak government that was incapable of making cuts?

One of the few advantages Britain has - as it strugggles to deal with a deficit which is almost three times as large as a proportion of GDP than when we called in the IMF in the 1970s - is that our system tends to create strong governments. But if we end up with a minority governent that has to buy support in the Commons, we could find lenders demanding a higher and higher yield on British government gilts - driving this country further into the fiscal mire.