UK News

They promised us market meltdown if there was a hung parliament. That was the Conservative pitch before the election.

That isn’t quite what happened. The pound did fall a bit, so did gilts and stocks but most losses were made up by the end of the first day after the result became known, which had been widely expected.

Attention, anyway, had moved elsewhere. There was already mayhem in global markets when British voters were going to the polls on Thursday. One hedge fund manager described it as seven or eight out of 10 when compared with the peak of the crisis.

Things were getting even more hairy on Friday and over the weekend it became clear that the European authorities would have to act to prevent the problem in Greece and they duly did, leading to stocks and the euro rallying as risk appetite  returned.

The $1 trillion global emergency rescue package has calmed things for now and the UK story may have moved to Page 4 from  the front page for global markets.

Talks are still going on between the Conservatives and the Liberal Democrats over possible power-sharing but so far no end remains in sight.

Both sides keep saying they are making progress but at the moment there is precious little detail and in reality all options remain wide open.

The Conservatives could rule in a minority government, they could have some kind of arrangement with the LibDems or they could have a formal coalition. There is still an outside chance of a LibDem coalition with Labour and smaller parties.

The big rescue package has bought the politicians some time particularly as there is no sign the ratings agencies are about to act but markets may start getting twitchy again in a couple of days.

A new prime minister should be in by Wednesday.