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Pound nosedives in wake of hung parliament
Sterling nosedived in trading this morning as no main political party was able to establish a sufficient majority and a hung parliament became the likely outcome of 2010's general election.
The pound hit a 12-month low against the dollar falling as low as $1.4597 and fell 3 per cent against the euro to 1.1547.
Mark Bolsom, head of the UK trading desk at Travelex Global Business Payments, said: "The pound has been crippled this morning by the spectre of political uncertainty.
"A hung parliament really is the worst possible result for the pound and FX markets are very volatile this morning.
"As expected, the pound has suffered, and sterling's losses are heating up in early morning trading.
"Investors are concerned that a hung parliament will paralyse the formation of a credible deficit reduction plan and we are beginning to see that concern manifest itself in the fall of sterling this morning, as they seek refuge in traditionally safe haven currencies.
"It is now crucial to our economic recovery that the main parties agree on a credible plan - indecision will threaten our credit rating and undermine the pound."
At the time of publication sterling stood at $1.47, down 0.57 per cent, and €1.15, down 1.31 per cent.
