A hung parliament could send financial markets into a tailspin and the pound and shares crashing , experts warned last night . Sterling has already fallen nearly five per cent against the US dollar in the past five weeks amid jitters about the outcome of the general election . Experts said last night that a badly hung parliament , with neither major party able to form a stable government , would be likely to send to pound plummeting by a further ten per cent . Sterling has already fallen nearly five per cent against the US dollar in the past five weeks amid jitters about the outcome of the general election . The sell-off could accelerate and spread to the stock and bond markets – driving share prices down and borrowing costs up for the government , businesses and families , analysts warned . A Liberal Democrat analysis released as party leaders prepare for tonight ’ s seven-way TV debate showed that 98 per cent of polls conducted so far this year to a hung parliament . All the major pollsters are predicting that no party will win an overall majority , and all leading bookmakers now have the shortest odds on such an outcome . Last night , a forecast from pollster YouGov suggested the likely result on May 7 is a badly hung Parliament . It predicted the Conservatives would end up on 297 seats , only slightly down on 2010 , Labour 262 , the SNP 35 , Liberal Democrats 30 , losing almost half of their MPs , Ukip four and the Greens one . A second Conservative-Lib Dem coalition would only be able to command a Commons majority of four , making it difficult to form a stable government . Senior Conservatives are understood to have privately discussed the possibility of a three-way coalition , also involving Northern Ireland ’ s DUP , who currently have eight MPs , to increase the Government ’ s majority . George Buckley , UK economist at Deutsche Bank , said : ‘ The 2015 UK general election is set to be the most unpredictable for nearly a century . There may be no good outcome for investors. ’ The pound could fall by ten per cent against the US dollar between the Thursday of polling day and the following Monday if a stable government does not emerge , according to experts at currency firm Argentex . ‘ Currencies react badly to political uncertainty , ’ said Argentex managing director Harry Adams . ‘ If polls continue to churn out mixed results in the lead up to D-day the pound will continue to soften . The real danger for sterling is if a coalition can ’ t be agreed by Monday. ’ Pollster YouGov suggested the likely result on May 7 is a badly hung Parliament . It predicted the Conservatives would end up on 297 seats , only slightly down on 2010 , Labour 262 , the SNP 35 , Liberal Democrats 30 , losing almost half of their MPs , Ukip four and the Greens one . Veteran City commentator David Buik , an analyst at stock broker Panmure Gordon , said a hung parliament could be hugely damaging for the investors in stocks and shares such as those saving for a pension . ‘ Markets are incapable of dealing with uncertainty , ’ he said . He said the biggest fear in the City is a deal between Labour , the SNP and the Liberal Democrats – an outcome that could send the stock market down by ten to 15 per cent ‘ in a few weeks ’ . ‘ The negative perception that this kind of government could have on markets could be visceral both at home and internationally , ’ said Mr Buik . A hard-hitting report by BlackRock , the largest fund manager in the world , said yesterday that ‘ a soothing outcome for the markets is hard to imagine ’ given Labour ’ s anti-business policies and Tory plans to hold a referendum on Britain ’ s membership of the European Union . ‘ Labour would be tough on business – and might be perceived as lacking fiscal responsibility , ’ the US giant said in the report . ‘ A Conservatives-dominated Cabinet would pave the way for an unsettling referendum in 2017 on the UK ’ s EU membership . ‘ Whoever wins – and the result could take some time to emerge – will lead a weak government likely to pass only watered-down legislation. ’ BlackRock , which invests in major British companies such as Tesco , said weeks of horse-trading to form a government would be ‘ harrowing for the UK ’ .
City fears the impact of an inconclusive election result on the markets . The pound has fallen almost 5 % against the dollar in the past five weeks . Fears it could fall another 10 % if a badly hung parliament after May 7 .