News / Europe

British Currency, Stock Markets Jittery while Nation waits for New Government

Jennifer Glasse

The European stock markets and the British pound reacted negatively to the announcement that Gordon Brown plans to resign later this year. Financial analysts are watching the British political situation closely and say uncertainty could further damage the markets.

British politicians are negotiating to form a coalition government. The third place Liberal Democrats could pair either with the Labor Party, which came in second, or the Conservatives, which won the most seats but not a majority.

David Jones the chief market strategist at IG Markets says the financial markets seem to have a favorite.

"I think the preference is for a Conservative Liberal alliance and it's really not so much a political preference, it's that they would have the most seats in Parliament," explained Jones.

Howard Archer is the chief economist for IHS Global Insight a financial analysis company. He says the British currency is being hurt by the possibility of the other political combination.

"Sterling is not being helped by growing speculation it could actually be a Labor-Lib-Dem coalition," said Archer.

Analysts say they want a stable government that can make decisions and cut Britain's $241-billion deficit as soon as possible, and because the Conservatives and Liberal Democrats would together have an outright majority they are the stronger coalition choice. Archer says for now the stock markets are taking a wait and see attitude.

"The markets can't react too much one way or the other because they don't know what the final outcome's going to be, but the longer the uncertainty goes on, the more the markets will be sort of worried that any agreement between the parties is going to be fragile anyway because it's taken them so long to hammer out an agreement," added Archer.

Jones says the longer the negotiations take, the more fragile the markets.

"I think if it drags on much past Wednesday I think we'll see further pressure on the pound," noted Jones.

Archer says once the makeup of the new government is decided, the markets will assess its viability and act accordingly.

"If they take the view that firstly the government is not likely to last for very long, and secondly it's going to find it very, very difficult to take strong action on reining in the fiscal deficit then I think you could see a real sell-off of UK assets," noted Archer.

The economy was a central theme during the British elections, now the markets are watching closely to see who emerges as a winner.

You May Like

Philippines, Muslim Rebels Try to Salvage Peace Pact

Peace process faces major setback after botched military operation to find terrorists results in bloody gunbattle between government forces, Moro Islamic Liberation Front fighters More

Republicans Expect Long, Expensive Presidential Battle

Political strategist says eventual winner will be one who can put together strongest coalition of various conservative groups that make up Republican Party More

Video New Wheelchair Is Easier to Use, Increases Mobility

Engineers have come up with a lever-operated design that makes use of easily accessible bicycle technology More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Liberia's Almost Last Ebola Patient Grateful but Still Grievingi
X
Benno Muchler
March 26, 2015 3:41 PM
Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video US, South Korea Conduct Joint Military Exercises

The Eighth U.S. Army Division and the Eighth Republic of Korea Mechanized Infantry Division put on a well orchestrated show of force for the media this week during their joint military training exercises in South Korea. VOA’s Seoul correspondent Brian Padden was there and reports the soldiers were well disciplined both in conducting a complex live fire exercise and in staying on message with the press.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.
Video

Video Young Filmmakers Shine Spotlight on Giving Back

A group of student filmmakers from across the United States joined President Barack Obama at the White House this month for the second annual White House Student Film Festival. Fifteen short films were officially selected from more than 1,500 entries by students aged 6 through 18. The filmmakers and their families then joined the president and a group of celebrities for a screening of their films. VOA’s Julie Taboh reports.
Video

Video VOA Exclusive: Interview with Afghan President Ashraf Ghani

Afghan President Ashraf Ghani, during his first visit as president to Washington, gave a one-on-one interview with VOA Afghan Service reporter Said Suleiman Ashna, about his request for a change in U.S. troop levels, the threat from the Islamic State, and repairing relations with the United States and Pakistan. The interview was held at Blair House, late Sunday, in Pashto.
Video

Video California Science Center Tells Story of Dead Sea Scrolls

The ancient manuscripts were uncovered in the mid-20th century, and they are still yielding clues about life and religious beliefs in ancient Israel. As VOA's Mike O'Sullivan reports, an exhibit in Los Angeles shows how modern science is bringing the history of these ancient documents to life.
Video

Video Angelina Jolie Takes Another Bold Step

Hollywood actress and filmmaker Angelina Jolie has revealed she had her ovaries and fallopian tubes removed to lower her odds of getting cancer. Doctors say the huge publicity over her decision will help raise awareness about the importance of cancer screening. VOA’s George Putic has more

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More