The pound suffered disorder British politics.

Keywords: Currencies, Pound sterling, Fiscal Policy, UNITED KINGDOM, James Cameron, Alastair Newton, Howard Archer, Joshua Raymond, Pound, London School of England, NOMURA HOLDINGS ADR REPR. 1 SH, IHS Global Insight, City Index.

The pound sterling back after the election of a hung parliament, which casts doubt on the government's ability to quickly implement a tighter fiscal policy.

Worst case scenario happened. The vote in the United Kingdom which leaves room for institutional uncertaintyPoses the problem of managing economic policy, especially fiscal, which will soon be implemented. Disagreement forces.
The financial sector has been quick to display are discontent. If the London Stock Exchange opened in decline - like the other places in Europe financers - More than 1.5% is primarily the pound suffers.

The British currency evolves into freefall on Friday. Around 11:45, the pound unscrews 2.33% against the U.S. dollar, less than $ 1.46, after briefly below $ 1.45. Such levels were not registered last year. To recall, earlier this year, the exchange rate GBP / USD had risen to nearly 1.64, and in summer 2009, he managed to rate in 1.7.
"The uncertainty posed by a parliament suspended the country's future certainly not provide an incentive for investors to trust, but should have more effect on the pound on the actions," says Joshua Raymond at City Index.

Public finance: it is urgent, but ...
The United Kingdom has the largest deficit of the major European countries, with 12% of GDP this year. The European Commission has used a rate of 10% of GDP in 2010. What remains far from the 3% required under the Maastricht Treaty of European Union.
The country should implement measures to consolidate its fiscal accounts. The British politicians have agreed in principle but not on the form: the Conservatives want to "roll up their sleeves" as quickly as possible "pou000r put order in chaos", while the Labour party do not want to rush things until next year, "not to jeopardize the recovery," said Howard Archer, an analyst at IHS Global Insight.
But "over the negotiations last, the more an agreement will be perceived as more fragile and the pound, bonds and equities should suffer," he predicts.
Nomura analyst, Alastair Newton, had predicted that the absence of an absolute majority would be a burden to the confidence of investors. The strategist can already see the pound down to 1.4 dollar.
Willem Buiter, professor of economic policy at the London School of England, he worries that the effects chain snap "fiscal tightening may be delayed, and markets the pound attack, and triple AAA country could be threatened».
For now, two major rating agencies, Standard & Poor's and Moody's, confirmed Friday that credit ratings of the United Kingdom. S & P said it would "evaluate the details of the budget strategy" of the new British government by the end of the year, and then change éventuellemnt its rating.