David Cameron chairs his first Cabinet meeting
David Cameron today chaired his first Cabinet meeting amid signs that harmony has broken out within the new coalition government and we may be in for a stable period in UK politics. Despite the fact that the Conservative party and the Liberal Democrat party are from opposite ends of the political spectrum there appears to be a chemistry between David Cameron and his deputy prime minister Nick Clegg which few had expected.
The main problem which the two party leaders will need to address in the short term is the UK budget deficit and the potential threat of a downgrading of the UK's AAA credit rating. This would be a major problem as debt repayments would spiral higher and speculators would look to attack the UK currency and UK stock markets. Indeed, only 24 hours ago we told of the European Union's attempt to move the spotlight to the UK amid suggestions that the pound would come under pressure and the government would be unlikely to receive any financial assistance from the EU.
While financial markets have reacted positively in the short-term regarding the change in the UK government there is much work to be done and many highs and lows are likely in the short to medium term.
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