The scene from the post-election trading floor

By Rebecca Marston
Business reporter, BBC News, Royal Bank of Canada dealing room

Image caption,
Post-election ponderings - what is the UK worth under a weak government?

"As uncertain as it can be" - the words from the tannoy as the morning pep talk to traders began here at the Royal Bank of Canada in London.

Static and crackle, squawk boxes and coarse tones were the soundtrack to dealings in currencies and government bonds.

But which way to trade? For weeks, the traders here have been betting on a Conservative victory. But the movements on the screens - tentative and nervous - initially mirrored the voters' lack of direction.

Investors hate uncertainty, and these people are worried that a hung parliament will mean a government unwilling to make tough choices and upset an electorate that barely wanted it.

Mainly, they fear that a weak government will be unable to force through measures to reduce the UK's high borrowing levels.

As the morning wore on, traders took the view that such an outcome was likely. The interest rate that their market charges for UK government bonds - gilts - went up, while the lack of confidence took the pound down to a one-year low against the dollar.

Piling on the pressure, the guidance from elsewhere for Friday's business was shaky in the extreme.


Seismic downwards movements on the US markets - virtually unseen in living memory - gave no strong lead to follow.

Many think the 9% plunge the Dow Jones reached in Thursday's session was a slip of the finger, rather than a sign the market had glimpsed the apocalypse.

And underpinning it all, as usual, was the theme of Greek debt woes and the knock-on fear of a euro break-up.

European leaders are trying to agree the final details of of a 110bn-euro ($139bn; £86bn) loan package to Greece.

On Friday, the cost of Greek and Portuguese government debt continued to rise, suggesting that investors remain unconvinced by the proposed rescue plan.

In London, traders in currencies and bonds began their day at 0100 in a special trading session they hoped would let them steal a march on the election result.

With far more to worry about than domestic concerns this morning, they were greeted by an uncertain sky, tending to the grey - as apt a description of the outlook for the financial climate as it is for the weather.