Britain's Election: Early returns...

...Are suggesting that the conservative party has made broad gains, but will fall short of an absolute majority in the House of Commons. Prime Minister Gordon Brown (Labor) has indicated that he may attempt to form a coalition government with the Liberal Democrats. This however is very likely to still fall short of a majority. Similarly David Cameron (Conservative party leader) may attempt to form a government by bringing in the Unionist MPs from N. Ireland. In either case it appears increasingly likely that Britain will have its first hung parliament since 1974.

There are significant fears in the British financial markets about the consequences of a hung parliament. Many fear that a minority government will not be able to impose the necessary (and painful) measures to bring Britain's exploding national debt under control. The Pound has been hit hard in foreign exchange rates over these fears and this could also impact the bond market and interest rates for Gilts (British treasury bonds).

Results are still coming in as of this writing and exit polling has in the past not always been reliable. Also many areas of the country where Conservatives tend to do better often report their results later. Thus nothing has been firmly decided. However, it is likely that in the overnight hours leaders in all of the major parties will be putting out feelers to some of the smaller parties about possible coalitions. Further complicating things are reports that one or more prominent Labor MPs are prepared to challenge Gordon Brown for leadership in the party if the results go badly. It would seem Mr. Brown may have a limited amount of time to try and patch something together, if he can. That said, there is at least one indicator that there is no urgent rush.

British media and press are reporting that H.M. the Queen has no plans to summon anyone to the palace before noon.