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The Economic Consequences of a Hung Parliament

Britain's just-completed election will produce a weak government and considerable uncertainty – and not only about the UK's withdrawal from the EU. The greater the political instability, the more acute is the need for a framework that will finally start to address the deep divisions and challenges facing the British economy.

MANCHESTER – The United Kingdom’s just-completed election was supposed to provide – as the Conservative Party’s campaign slogan put it – a “strong and stable” government. It ended up doing the opposite, producing a hung parliament and the likelihood of another general election later in the year.

Meanwhile, the clock is ticking for concluding negotiations with the other 27 EU members on the UK’s withdrawal from the European Union. To anyone with an inkling of how demanding and complicated the Brexit talks will be, and how ill-prepared British politicians and officials are for them, this is a depressing prospect.

Although a hung parliament, with the Tories attempting to form a minority government, might tilt UK politics in the direction of a “softer” Brexit, at least in terms of the future trade relationship with the EU, it will probably leave Britain’s political leaders even less able to cope with the negotiations. Britons will have to hope that EU leaders are willing to show some compassion: after all, the one clear message from voters was their lack of confidence in the alternatives on offer.

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