The FTSE 100 has gained more ground this afternoon, though the increase has less to do with the Clegg and Cameron show in the Downing Street garden and more with an opening rise on Wall Street.
When the two leaders emerged to meet the press the leading index was up nearly 30 points, and it currently stands 51.40 points higher at 5385.21. After a brief wobble, the pound has also picked up to $1.487, although it still down on the day after the Bank of England - among other things - seemed to hint there would be no early rise in interest rates.
Meanwhile the Dow Jones Industrial Average has climbed around 90 points in the first hour of trading, helped by news of Spain's austerity package, easing fears of Greek contagion, and a rise in technology shares.
Still, the market seems to be willing to give the UK coalition the benefit of the doubt. David Buik at BGC Partners said:
There is an upbeat feeling that this strange and unexpected coalition might work and the market is prepared to give it the benefit of the doubt until there is more meat on the bone – or not as the case may be.
The inflation report reminded us as to how dire the outlook is. QE is likely to remain in situ for some time and don't be surprised if it's added to in the months to come. The wholesale money markets are still in remission and the banking fraternity will need all the help it can get. The employment figures were disappointing – up 53,000 with the total reaching 2.5 million. The outlook cannot be good. If public expenditure cuts are implemented to any meaningful degree, 250,000 jobs in the public sector will surely have to go in the next 3 years. All political parties to date have been politically expedient in being economical with the truth.
