Surprise!

The Telegraph's own Benedict Brogan has highlighted a piece of speculation from Morgan Stanley that will make for unhappy reading in HM Treasury.

Morgan Stanley predicts a number of 'surprises' for the world's economy, including;

"Surprise #3: UK becomes the first of the G10 to have a major fiscal crisis as elections lead to a hung parliament.

UK fiscal crisis exacerbated by political gridlock. The poor state of government finances is one of the key risks we see in the medium-term. Therefore, one tail risk and potential surprise is that a government bond and FX crisis materializes already in 2010.

One candidate for such a scenario is the UK where the upcoming elections could provide a catalyst, particularly if they result in a hung parliament. Such an outcome would likely lead to either a coalition or minority government where the ability to govern effectively will depend on the main party's ability to forge a consensus view to drive through necessary change.

In the run-up to the election growing fears over a hung parliament would likely weigh on both the currency and gilt yields as it would represent something of a leap into the unknown (given that the last hung parliament in the UK happened in 1974) and would increase the probability that some of the rating agencies remove the UK's AAA status."

This argument seems to be that a hung parliament would lead to the collapse of the economy. So if it looks like a hung parliament is in the office look forward to the smaller parties dusting off their wishlists...you want a stable Government Mr Cameron/Brown...then you have to deliver policy X for us.

The SNP, Lib Dems (and maybe even a few Green MPs) could have considerably more clout after the election than people might think.