Business leaders have expressed their deepest fears about the country being in a state of limbo and warned that severe damage could be done to the UK economy unless politicians make a decision quickly as to who will form the next Government.
Miles Templeman, director-general of the Institute of Directors, said: “It’s vital that this political vacuum is filled as quickly as possible. The country simply can’t afford an extended period of political horse trading which delays much needed action to tackle the deficit. Politicians have postponed the difficult decisions on public spending cuts for too long already. Further delay will only jeopardise the future of the UK economy.”
Fears of a hung parliament were realised this morning as the Conservatives failed to win enough seats to from a majority Government. The UK will now have a hung parliament for the first time since 1974, leaving markets, business leaders and investors concerned over who will take charge.
Business leaders said the UK economy is at a critical phase in its recovery, adding that the result had come at the worst possible time, They have called on the Government to push through Parliament the much needed deficit cuts and not waste time over political infighting.
The property market could be particularly badly affected, with warnings that activity on the housing market is likely to dry up.
James Thomas, head of Residential Investment and Development at Jones Lang LaSalle: “The spring market is traditionally a time when volumes in the property market bounce and activity levels peak, however the result of yesterday’s general election will squeeze transaction volumes.”
He added: “There will be a long list of repercussions after today’s result, and transparency and detail on housing policy is crucial: the sooner this can be provided the better.”
Howard Archer, chief UK economist at HIS Global Insight said: “The longer that any horse trading goes on between the parties after the final result is known, and the more fragile any agreement is perceived to be, the more that sterling, gilts and equities are likely to suffer.”