Nick believes the most likely scenario is a Conservative-led majority with support from the Liberal Democrats and any MPs from the United Kingdom Independence Party, similar to what we have now. If that happens, Nick thinks there’ll be a knee-jerk rally for sterling, equities and gilts. However, any rally in Cable could be short-lived as investors focus on the promised EU referendum. If the Labour Party looks set to lead a coalition majority government with the LibDems and with tacit support from the Scottish National Party, that uncertainty about Britain’s membership of the EU would be removed. However, the markets aren't likely to take kindly to a left-wing administration and any sterling rally would be short-lived, says Nick. He also looks at two other scenarios, including one that he believes would be ‘cataclysmic’ for the UK economy. Nick also gives his thoughts as to what could happen if negotiations to form a government are particularly protracted.