Peter Hoskin

Market tremors

Market tremors
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Forget the polls, the markets should be enough to give any of us a sharp dose of The Fear.  Exhibit A: Sterling, which has slumped below $1.50 today, for the first time in nine months, and on the back of what analyists are calling "deficit worries".  And Exhibit B: the UK Gilt markets, where rising interest rates suggest that investors are rapidly losing confidence in Britain's ability to pay back its debt, just as Coffee House's Mark Bathgate warned a few months back.  Check out the FT for the full story.

Of course, I say "forget the the polls" – but this is all very poll-related.  The possiblity of a hung Parliament – and, with it, the possibility of political paralysis – is preying heavily on the minds of investors.  This, by itself, should give the Tory case for undiluted change a boost.  But I expect Brown will reheat his full menu of "talking down the economy" soundbites, should Cameron & Co. point this out themselves...

UPDATE: Just noticed that Tim Montgomerie already had a similar post up here.  As Tim neatly puts it: "It's difficult for the Tories to warn voters directly [about these market slumps]. But newspapers and other opinion formers must point to the dangers of much higher interest rates if Britain does not elect a strong government that is capable of coping with the fact that Brown has doubled the national debt."