British general elections will cause financial turmoil, analysts and economists warn
Few elections in recent history have the potential to destabilise Irish politics as much as the British elections this May.
The vote is sparking increasing worry among Irish chief executives according to a poll last week but it is also worrying analysts elsewhere in Europe.
That uncertainty over the election will manifest as "significant volatility" in the second quarter of the year, Swiss wealth manager UBS warned on Friday.
"Just as they did with Scotland, the markets are saying 'fine, fine, fine', but then as the date approaches they will start to panic a little bit," Bill O'Neill, head of UBS' investment office, told reporters in London.
"We think there will be significant volatility in the second quarter of 2015 - it is almost inevitable," he went on to say.
May's election outcome is considered unprecedented, in that forecasters are unusually divided over the likely outcome and the result is highly uncertain. Goldman Sachs has described the upcoming vote as the "most uncertain election in a century".
UBS Wealth Management research found that the lack of clarity over an outcome "may exert a downward pull on some UK assets". If the election resulted in a "double minority" - whereby two parties both failed to come up with the seats to form a coalition government - then this would be "particularly troubling".
"Declining support for the two major parties and the rising popularity of new alternatives - SNP, UKIP, Greens - significantly reduce the chances of a single-party victory," said UBS.
"For a nation accustomed to government by a single party, this transition [towards smaller parties] is not going to be smooth," it continued. UBS suggested that a combination of the Liberal Democrats with either Labour or the Conservatives could fail to produce the 326 seats required for an overall majority.
"Markets will also react - not always calmly," UBS said, as both they and ratings agencies "may question the UIK's commitment to its deficit reduction programme".
Germany's Deutsche Bank has said that "for investors, there may be no good outcomes at this general election".
UBS said that there was no immediate danger of a ratings downgrade. "The economic context is relatively very bright," said Mr O'Neill.
"We have a very robust consumer recovery, with the first rise in real average earnings in six years, easy credit conditions, low inflation and the stimulative effect of the collapse in the oil price," he added.