Investors fear double election will prolong UK political risk

The possibility of two separate general elections in the UK this year is causing concern for fund managers, who say it could lead to prolonged turmoil for equities and sterling in 2015.

With voter opinion fragmented in the lead up to the 7 May election, forecasts suggest a hung parliament looks increasingly likely. That would prompt the Conservatives or Labour to try to form a coalition government, or govern via a minority government if they are unable to reach an effective deal with another party. This second scenario, where the ruling party does not have a majority in Parliament, is causing concern for fund managers, particularly as a single Parliamentary vote of no confidence would be enough to bring about a fresh general election. Simon Brazier, manager of the ...