With the manifestos out of the way and as we head towards the final stretch of the election campaigns culminating with the General Election, political deadlock remains in place. Neither of the two main parties have gained the upper hand with polls suggesting a very tight race to the finish line. So why are the Conservatives not getting more traction when it would seem they have quite a few trump cards?
They have after all had much of the limelight with the budget in March which was widely seen as positive, allowing them to drive home the message that voters are better off sticking with them due to their track record on the economy. The Conservatives not only continue to poll much higher than Labour when it comes to the stewardship of the economy, but also on personality ratings between Cameron and Miliband and considering how good things are in terms of employment, wages and inflation, they should be consistently polling ahead of Labour in the national vote.
Even the business community has been very vocal in their support for the Tories, but this seems to have fallen on deaf ears. However, herein lies a problem as this business lobbying seems to have made voters more wary than supportive of the Conservatives, as the bad press around firms avoiding taxes has damaged their voice and the stigma of Tories representing big business as opposed to the person on the street naturally makes the wider public sceptical. This is a reputation that is not helped by having an Old Etonian in charge, which for his political opponents is all too easy to attack with claims of David Cameron being elitist and out of touch.
It's not only the Tories struggling to make an impact, but the Labour party too just aren't seen as being fit to govern in the eyes of many voters. Whether it's the mistakes of the last Labour government or the question marks over their current leadership and policies, it's clear that their strategy isn't striking a chord.
When considering young voters, or at least those that are engaged and registered to vote, it's hard for them to look favourably on the governance of the last five years as they have seen little in the way of anything to get excited about. From an increase in tuition fees to high youth unemployment, in a labour market that is more competitive than ever when it comes to graduates and apprentices looking for full time work. As a result, this is going to be a generation that will be hard for the Tories to convert into Conservative votes, making future elections an uphill struggle as well.
On the whole most voters tend to be fickle, too quick to forget and now that five years of austerity have passed, few have the stomach or even understand why further austerity is being proposed by the Conservatives, Labour and Liberal Democrats. For those younger voters as well, few really appreciate the impact of the 2007/08 credit crunch and banking crisis. This is just part of the reason why smaller political parties are attracting voters who see them as an alternative to the established order.
But what would the financial markets like to see? Interestingly, it is probably another coalition of some sort that can provide a degree of certainty and stability. Either an outright Conservative or Labour majority could actually be bad for the pound and stock market. The prospect of leaving the EU after a referendum under a Tory government could send the markets into a tailspin, meanwhile a Labour government could be seen as anti-business and fiscally irresponsible, also causing considerable worry for both domestic and overseas investors. Whilst investors would probably rather see neither a Conservative nor Labour outright majority, this also seems to be case for the UK electorate who is just as fearful of both scenarios, trusting neither of the two major parties to take control of Westminster.
There is however still time before polling day and there are plenty of undecided voters out there who could tip the balance either way. These last couple of weeks are going to be crucial, no one will want any slip ups as in this election every vote will count, particularly in marginal seats.
Disclaimer
This article does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Any opinions made may be personal to the author and may not reflect the opinions of FxPro.