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Jakobsen: UK election will leave little decided

It's the final full week of campaigning in the UK and the opinion polls have the two largest parties; Labour and the Conservatives, neck and neck. Another hung parliament is the most likely outcome of what has been the most unpredictable election campaign for decades.

Saxo Bank's Chief Economist Steen Jakobsen gives us his thoughts and views on the possible outcomes and how the vote affects the investment outlook. It's the days after the actual election on May the 7th which count, when the parties, will most likely, gather for marathon coalition building talks and that's when Steen expects there to be more of a market impact with Sterling volatility spiking and a negative stock market reaction.

A conservative led coalition would set the UK on a path to a promised referendum on EU membership. A vote could be held in 2016. The prospect of a 'Brexit' could be considered more worrying for the markets than a Labour led coalition. If Labour does do a deal with the Scottish National Party in order to form a government then we could also be heading for another referendum in Scotland.

So some stark choices for the UK, a messy election which will leave much undecided and the possibility of either of two referendums or even another general election this year which will only upset the markets further.

02:51 minutes
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