But will this be seen by the markets as any worse than the possible consequences of a Conservative-led government?
In particular, the promise of a referendum on membership of the European Union by 2017 – assuming the Conservatives can convince their governmental partners to include this in a coalition agreement – could have negative consequences for both investment and sterling.
After all, the U.K. is the second most important destination in the world for inward investment after the U.S. Whatever the result of the referendum itself, its announcement would mean two years of uncertainty over whether the U.K. remains in the single market. This would undoubtedly present a serious test of the resilience of foreign direct investment, and would likely depress the currency as a result.
With many different political configurations possible after this election, the probability distribution of the various outcomes is exceptionally flat. There is a good chance that the electorate vote for "none of the above" – that the distribution of parliamentary seats among the parties renders it impossible for any grouping to form a stable government.
While the Fixed Term Parliaments Act introduced in 2011 makes fresh elections more difficult, this remains a real possibility resulting in a period of potentially prolonged volatility in the U.K.'s financial markets. In short, if the polls stay where they are, it's easy to see why there may be no good market outcomes of this general election.
George Buckley is chief U.K. economist at Deutsche Bank.