UK

Bond managers fear for gilts and sterling in the coming days and weeks as the markets react poorly to the reality of a hung parliament.

Gilts and sterling are falling sharply this morning as investors react to the likelihood of a UK hung parliament.

As a bond investor, I am almost hoping we do get a hung parliament.

John Chatfeild-Roberts, the Jupiter CIO and head of the Merlin multi-manager team, believes while all election scenarios are a possibility, the UK will be forced to accept some harsh fiscal action whatever the outcome.

The overwhelming majority of UK fund managers are hoping for a Conservative victory in today's General Election, believing a David Cameron-led Government would be best for the stock market.

Gilts have rallied significantly into the Election, more driven by the UK by being associated with the core of Europe than the chance of a significant Tory majority.

Newspapers gripped with Election fever have Cameron's name splashed over (almost all) the front pages, as polling day 2010 kicks-off.

Net retail inflows of £3.3bn over the first three months of the year helped propel Schroders to a record quarterly inflow in Q1.

Even the great Warren Buffett, who has successfully negotiated a number of crisis situations in his time, has admitted he would not want to be responsible for tackling the UK's debt problem.

In the context of the forthcoming election, the fiscal deficit dominates the political discourse, writes Deutsche Bank's Paul Wharton