The market consequences of a minority Tory government
On BBC Breakfast this morning, Vernon Bogdanor said he had no doubt that there would be a minority Tory government, without explicit support from the Lib Dems, that would limp along till another general election in the autumn.
Now he's seen a good few electoral cycles. And his view is not to be dismissed lightly.
As I said yesterday (see A coalition forged by a sterling crisis), the obstacles in the way of the Lib Dems forming a pact with either the Conservatives or Labour look insuperable.
So what would happen on markets if the Tories do end up governing as minority, with all legislation subject to cross-party negotiation and haggling?
Well, the strong probability, perhaps a racing certainty, is that investors would take fright.
Because although a Tory chancellor could cut some spending without resorting to Commons votes - although not if such cuts involved fundamental structural reforms to public services - any tax rises would have to be put to Parliament.
Investors would be unsettled at the idea that a Conservative finance bill or reconfiguration of the public sector would be vulnerable to being voted down in toto - because confidence in plans to reduce the UK's record peacetime public-sector deficit would be undermined.
In those circumstances it is highly likely that sterling would fall and that the government would find it harder and more expensive to borrow.
Or to put it another way, the warning made during the election campaign by Ken Clarke, the Tory Business Secretary, that the UK could find itself again asking for financial succour from the International Monetary Fund might be prescient rather than alarmist.
Here's the painful irony. If there were another election in the autumn, fought against the backdrop of a flight from sterling, it would be all about the detail of how to slash the £160bn-odd deficit.
That is the debate that many said we should have had over the past few weeks, but didn't - in the view of some - because the party leaders were too frightened to tell voters the painful truth about precisely which public services would be squeezed.
A combination of an indecisive election and pressure from financial markets may make that a debate postponed rather than cancelled.