Morning markets: FTSE edges higher as pound drops on first day of Con/Lib coalition

The FTSE edged higher while sterling fell from a 10-month high on the first day of the UK's new coalition Government.

At 9.40am, the FTSE 100 edged higher, up 0.4% or 21.49 points to 5355.70. Meanwhile, in early morning trading, the pound fell against the US dollar on fears that the parties may struggle to overcome ideological boundaries when trying to tackle the deficit. Sterling dropped to $1.4897 from $1.4956 when it gained 0.7% last night on the news the Conservatives were to form a coalition with the Liberal Democrats. However, bond investors showed signs of confidence in the new Government, the 10-year gilt yield moving 3 basis points lower to 3.85%. Risers on the FTSE include Rolls Royce...