As talks on possible Tory/Lib Dem coalition continue, how are the markets reacting to the ongoing unpredictable political situation caused by the hung parliament?

The FTSE fell 138 points yesterday to 5,123 and the pound was down against the dollar and the euro.

Alan Clarke, UK economist at BNP Paribas, and Jim O'Neill chief economist at Goldman Sachs, examine how the markets might react on opening on Monday if coalition talks have not been finalised.

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