Hung parliament may not be disaster markets anticipate

Schroders' top managers and economists discussed their predictions for the outcome of the general election last week, and were largely in agreement that Britain is facing a hung parliament.

However, Keith Wade, the group’s chief economist, says this does not necessarily spell disaster for the market. “I do not think a hung parliament will be that bad for markets – they could not care less if it is tax rises or spending cuts. If the Government’s policies are implemented, we will have a credible fiscal plan,” he says. Richard Buxton, the group’s head of UK equities, says the reaction of the gilt markets to the outcome of the election will be crucial to how equity markets behave. “If the policy moves are early and aggressive, this will support the gilt market,” he says. “If th...