'Dangerous cocktail' of Labour-SNP deal would hurt economy, says Osborne

Ed Miliband counters chancellor's charge with claim that Tory spending cuts are going to be deeper in the next three years than the last five

A post-election deal between Labour and the SNP would represent a "dangerous cocktail" that would lead to higher interest rates and a rise in unemployment, George Osborne has warned.

The chancellor, who admitted the general election result would be close, seized on the claims by a series of banks and pension investment funds that a deal between the SNP and Labour would be destabilising for the economy.