As the first hung parliament in three decades is confirmed, Travelex Global Business Payments conducted a poll amongst their business clients this morning to ascertain their reaction in what has been called the worst possible election outcome for the pound.
48 % of the businesses interviewed thought a hung parliament would have a negative impact on their business, with most blaming the resulting weak pound.
On bank lending, 38% thought the Conservatives would be best at encouraging banks to lend to businesses. Only 5% trusted Labour to get the banks lending more freely again.
Paddy Earnshaw, Customer Director at Travelex Global Business Payments said, âMost of our business customers are concerned about the impact a hung parliament is having on the pound and unfortunately we expect it to remain weak for the foreseeable future.
âWorryingly, a hung parliament may also affect their ability to obtain credit for their business. If the markets do not see the deficit being addressed quickly and effectively, the UKâs credit rating will come under pressure. If our credit rating is downgraded it will put the cost of borrowing up for UK businesses and could even tip us back into recession.
Earnshaw concludes, âPolitical uncertainty has traditionally haunted all major currencies. Until the political outlook becomes clearer it is likely the pound will continue its downward trend.
âAlthough exporters will have enjoyed sterlingâs depreciation, over the next week most British businesses will be looking for decisive action from the main political parties to come up with a credible deficit plan to stall sterlingâs slide.â