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Demand for UK bonds eases over threat of hung parliament

Monday 8th February 2010
By Mike Jones

The increased possibility of a hung parliament as Conservative poll dominance wanes has led to a cooling in demand for UK bonds.

According to the Financial Times, UK bonds have sharply under-performed those of Germany since November when the prospect of a hung parliament first emerged.

Meanwhile, Shadow Secretary of State for Business Kenneth Clarke has warned that financial markets would "panic" if Gordon Brown won the upcoming General Election.

The former Chancellor said there would be huge concerns in the City because the Government's plan for stabilising public finances lacked credibility.

He told Sky News's Sunday Live programme: "I think there is a great general desire to get rid of him [Gordon Brown] and the present government, which has plainly played out, and is quite incredible when it comes to tackling the debt and the deficit that they are leaving behind.

"There would be quite a panic on the markets, I think, if by some extraordinary turn of events Gordon Brown were returned to power."

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