Looming election puts battered British markets back in the spotlight

Britain's economy might well have fallen into recession late last year, money has exited UK stocks and fears about unsustainable borrowing that have resurfaced ahead of a March 6 budget may stick until an election expected later this year. But the prospect of a change in government that lifts sentiment towards the economy has seen investors debating whether UK markets are too cheap. An expected victory for the EU-friendly opposition Labour Party may lift sterling, while – regardless of the election outcome – looming rate cuts should lend support to government bonds, or gilts.