The pound has fallen against the dollar in reaction to uncertainty about the General Election result and its effect on the UK's deficit.
According to yesterday's Sunday Times, the Conservatives' lead has dropped significantly - to just two points. This margin would be insufficient to guarantee a working majority, and would result in a hung parliament. Such a result could also see Gordon Brown returned to Number 10.
Many analysts are concerned that a hung parliament would render the government unable to effectively deal with the UK's porous finances. Traders sold sterling in response, causing the currency to fall against the dollar.
This has underlined the impact of the election on the financial health of the UK. Fluctuating exchange rates have an immediate impact on importers and exporters, amongst others.
But some analysts are equally convinced that a hung parliament would actually be good for the economy. Coalition governments operate successfully in a number of other countries around the world, most notably in Germany. The UK also has a rich history of coalition governments, including that of Asquith in 1915-16 and the Attlee-Churchill coalition of the 1940s.
Many commentators expect that the election will be called for May, but a firm date is yet to be set.
