turmoil was growing on the stock markets as a hung parliament became the most likely outcome of the general election in Britain.
The markets, including the FTSE 100, fell and the pound dropped in value against the Euro.
As one City analyst put it, “The election is shaping up to create the worst possible outcome at the worst possible time. Investors’ nerves are already jangling and this added uncertainty will undermine UK equities further.”
For now financiers believe that the British government will pay its debts. But they are nervous about any instability.
Analysis from the European Commission this week showed that Britain’s budget
deficit will be the biggest in the EU this year, at 12 percent of national income.
Of course not everybody is expected to feel the pain of the crisis in the same way.
So on Friday the Royal Bank of Scotland announced profits of £713 million for the first three months of this year.
That comes after the government has spent billions of pounds of our money bailing out the banks.
But the financial panic is not just about the election. Shares around the world plummeted on Thursday amid fears that the turmoil in Greece could spread to other parts of Europe.
The Dow Jones Industrials index fell almost 1,000 points at one stage – the biggest drop since 1987 – before recovering to a loss of 328.
The current flashpoint of the crisis is Greece where the government is driving through austerity measures after it agreed a bailout with the European Union and the International Monetary Fund.
Although the Greek parliament passed the country’s cuts bill, bankers are worried that unrest will spread to Portugal and Spain.
Greece shows the harshness of the cuts but it also shows the potential for resistance – there are constant protests and strikes against the government measures.
As the politicians make backroom deals and the markets gamble with our pensions and public services, we need to raise the scale of resistance here to defend ourselves from the impact of their crisis.