Will political uncertainty weigh on the economy?

There are reasons why the political uncertainty triggered by the hung Parliament result won’t weigh too heavily on GDP growth. After all, the UK economy has proved resilient to recent bouts of political uncertainty and, so far, there are few signs of a tightening in credit conditions that could cause a slowdown in growth. Past evidence suggests that a Government with only a small majority wouldn’t necessarily weigh on the economy either. However, if the small majority forces the Government to move its fiscal policy stance closer to the proposals of other parties, then there might be larger effects on the economy.