It’s been a long night.
As predicted by many, a hung parliament beckons. And not just any old hung parliament. Whichever permutation is examined it looks like a coalition potentially built on sand. For Labour to form a coalition with the Liberal Democrats they will also need the support of others like the Scottish National Party, Plaid Cymru and possibly even Caroline Lucas, the UK’s first Green Party MP.
The cost could prove exorbitant and delay clarity around how the new government will deal with the deficit.
As mentioned in my earlier blog this week, the extent of public sector cuts is likely to be on a scale not seen since the 1920s. Observing the right speed limits in implementing those cuts means not going too slowly as well as not going too fast. In terms of the overall vote, what is interesting is how support for the Conservatives has been highest in the areas of the country that have benefited most from growth in the private sector knowledge economy over the last 10 years, whereas the Labour vote has held up in areas most supported by public sector investment in knowledge economy jobs (with major exceptions to both those statements). What is for certain is that the currency markets are already reacting badly to the news and are selling sterling fast. Mind you, that could be good news for British exporters.
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