UK economy now in the fog of election uncertainty | Larry Elliott

There are echoes of 1974 rather than 1983 as hung parliament points to possibility of second poll within months

When it closed for business on election day, the City of London was in confident mood. Theresa May was Margaret Thatcher. Jeremy Corbyn was Michael Foot. Labour's manifesto was, if not the longest suicide note in history, the second longest. Opinion polls were pointing to a Tory majority of about 100, which is what Thatcher got in her second general election victory.

By 10pm when the results of the exit poll were released, it dawned on the City that this was not a rerun of 1983 but of 1974. May was not Thatcher, she was Ted Heath, a prime minister lacking the human touch who had called an election when there was no need to do so. With a hung parliament pointing to the possibility of a second general election within months - another echo of 1974 - the markets responded in predictable fashion by dumping the pound.

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