The Forum of Private Business (FPB) has called for MPs to put aside their differences and create a functioning administration as quickly as possible after last week's general election result.
The Forum believes small and medium-sized enterprises (SMEs) are crucial to economic recovery with the potential to create jobs and spearhead innovation, but warns that uncertainty and confusion caused by a hung parliament could jeopardise this.

Recent research from the organisation found that almost three quarters of small business owners were already finding it difficult to plan for 2010, even before the result of the election was announced. With a hung parliament potentially holding up tax and spending proposals, this uncertainty is likely to increase further, said the Forum.

FPB chief executive Phil Orford said: "I expect many small businesses will be disappointed that the election has resulted in a hung parliament. However, the outcome can't be changed so it is vital that the newly-elected MPs put aside party politics and work together to come up with a credible system of governance."

He added: "With the economy still in a very precarious state and a mountain of public debt to be tackled, business owners need our elected representatives to move away from inter-party point-scoring and show political responsibility."

The Forum says priorities for the new government should include securing the UK's reputation as a good place to do business by bringing Britain's finances under control with a combination of smart taxation and smarter cuts to public spending.

It is also calling on the government to completely scrap the planned rise in National Insurance Contributions.

Richard Lambert, director-general of the Confederation of British Industry, also commented on last-week's result: "Business needs stability and wants to see a clear decision reached swiftly, which delivers a stable new government. The UK's route to economic recovery needs to be firmly established. The markets have been expecting this outcome, but uncertainty brings risk. The next few days will be critical."

The political uncertainty is also affecting consumers, according to market analyst group Mintel. Recent Mintel research on consumer attitudes towards various economic factors showed that a third of people think interest rates will rise, half think unemployment would be up and two thirds think taxes would be higher by the end of the year.

Research also shows that adding to their rainy day fund tops the list of consumer priorities, while lending data shows that people are now far more reluctant to take on new debt. While this is good news for people's personal finances, says Mintel, it's not so great for firms reliant on big-ticket, discretionary purchases.

Mintel spokesman Richard Perks said: "Consumers are nervous. They can see there is economic pain ahead and after a binge last Christmas, Mintel expects them to start concentrating on their finances. A hung parliament will do little to change that apart from add to the level of uncertainty. Nervous consumers are cautious consumers. They will be delaying big-ticket purchases and redoubling efforts to pay off debts and to increase savings."