Goldman calls marginal Tory victory in general election

In a research note, the global investment bank said the outcome of the May 7 poll is more uncertain than any in a hundred years.

Analyst Kevin Daly said: “The likelihood of any party gaining an overall majority appears low, but we think the Conservative Party is marginally more likely than Labour to win the most seats and lead the next government.”

Current opinion polls see the parties neck and neck with the added complication that party support is more fragmented than ever.

But Goldman is forecasting relatively strong economic growth with a significant improvement in household disposable spending, which it says will favour the incumbent Conservative and Liberal Democrat parties in the months leading up to the election.

It also points to “an unusually wide gap” between the Conservatives and Labour in terms of economic competence in opinion polls.

“This gap has played an important role in past UK general elections – most notably in 1992 – skewing the final outcome relative to opinion polling prior to the official vote,” added Mr Daly.

Goldman’s intervention will be controversial. The US bank has attracted criticism over its behaviour in the lead up to global financial crisis and its tax affairs in the UK.

In its note, Goldman said the UK recovery will be sustained through 2015 and predicted a pick-up in wage growth and that inflation will remain low. It also forecast a rise in interest rates.