Conservatives may need emergency budget after poll

LONDON (Reuters) - Conservatives may be forced to stage an emergency budget to calm markets and prevent a run on the pound if they win an election due by next June, a senior Conservative was quoted on Saturday as saying.

Philip Hammond, a Conservative Treasury spokesman, urged voters to give his party a big majority so a new government could act boldly to cut public debt, which is rising sharply because of a deep recession.

Interviewed by the Guardian, he warned that the public finances were in such a state that "the worst outcome for Britain would be an unclear political result at the election."

The Conservatives are well ahead in opinion polls, suggesting they are on track to end 12 years of Labour rule at the next national election.

They got a boost on Friday when they won a parliamentary seat from Labour, securing a big majority that would give them a landslide if repeated nationally.

Data on Friday showed the British economy shrinking more rapidly than expected, darkening the outlook for the public finances. The public deficit is forecast to reach 175 billion pounds this year, more than 12 percent of Gross Domestic Product.

Public spending will be a key battleground of the next election, with the Conservatives accusing Labour of ignoring reality by pledging to continue to spend.

Hammond, who as "shadow" chief secretary to the Treasury is likely to be the man who would have to rein in public spending if the Conservatives win, said he was "likely to become a great figure to pin up on the dartboard and throw darts at."

"I am sure there will be short-term pain," he said.