We have become used to turbulent times since the onset of problems in the financial markets and the resulting credit crunch but we are now entering a time of real uncertainty.
The coming weeks will see a flurry of political activity as the various parties lobby for the favour of the electorate.
Bookmakers will do their best to forecast the result and make a profit on the outcome and financial markets will try to anticipate all possible outcomes and set prices accordingly.
Theoretically, a profit could be achieved by any investor with access to a crystal ball.
Politicians will have to talk about a wide range of issues but the state of the nation’s finances will be a major focus and there is now wide agreement that the fiscal deficit cannot be maintained in the future.
The issue will be the size and the timings of cuts. Critical to these decisions will be the effect on the credit rating enjoyed by the UK and the danger that a downgrade would cause the cost of borrowing to rise.
Dealing effectively with the recession will reduce levels of unemployment and see growth return more rapidly to the economy. The risk of a double-dip recession has still not gone away – and neither has the risk of another collapse in house prices.
None of this uncertainty is good for the housing market or for the immediate prospects of the mortgage market.
We have to live with this political uncertainty but the future of regulation is also in the spotlight.
We are already aware that a change in Government may signal significant change for the FSA and, more immediately, a new chief executive will take control.
Hector Sants has been accused of presiding over a period of significant regulatory failure and has recently announced a new project that will see the regulator grow sharp and unfriendly teeth.
The coming months will see the recruitment of an additional 460 staff, funded by the inevitable rise in regulatory fees. The new budget will total around £455m – a significant burden on financial firms and a heavy cost for consumers.
Consumer confidence is a very important factor for any type of business. Public regard for politicians is at an all-time low, bankers have become
national figures of hate and financial service products in general are struggling to retain the confidence of customers. Yet the benefits they can
provide are essential for planning security and wellbeing for the future.
The FSA – or its successor -must play its part in helping create a climate conducive to rebuilding consumer confidence.
Richard Fox is chief executive of the Chartered Insurance Institute’s Society of Mortgage Professionals