Wednesday, 12 May 2010

Good Morning Mr Cameron

We now have a new PM David Cameron but also a deputy PM NIck Clegg.. what does this mean? We have a right wing PM and a left wing Deputy PM.. can this work?
The FTSE 100 Index was previously in free fall seems to be stabilizing but is still on the fall, this could show that the new coalition has yet to gain the support of business.
The pound however has risen from a sump of 1.47 against the dollar to just under 1.5, this shows that the deal has been positive but the pound is still far off 1.54 which it was at the start of the month.
Its difficult to tell what the people think of this deal, many die hard Torys and Lib Dems feel betrayed but it is generally seen as a good decision by most I believe as at least we now have a government... although facebook polls showed most people wanted a lib-lab coalition and if not a re-election with only a small proportion wanting a Lib-servitive coalition but facebook does not represent the whole population. Perhaps this is one of the challenges to David Cameron, trying to persuade the youth that Torys are not evil! He will also face scrutiny Europe for his parties allegiance in the European parliament.
We don't know what the result of this deal will be, many labour supports believed Tory cuts would cause a double dip recession... this is unclear at the moment but they have stated they will not increase Nation Insurance or and will seek to alleviate tax on lower earners which though theories of Fiscal policy is good for the economy unless we already have restored Aggregate Demand to is former level in which case it could lead to future inflation. Inflation is something to watch
What ever happens we can expect interesting times ahead, some think this coalition will fall apart and we will soon have a re-election but what is certain these two men have a hard time ahead.

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