The chief economist of the HSBC bank has warned that an “indecisive” outcome in the General Election could result in “not a hung parliament, but a strangled parliament”, unable to tackle the major issues facing the country.

Speaking at a business lunch in Manchester (hosted by chartered accountants Hurst), Mark Berrisford-Smith (pictured) also said that uncertainty over the prospect of a referendum on EU membership could be damaging.

“The big problems are the deficit and the balance of payments, but these are manageable, as long as we are in a stable political environment. What could upset the recovery is the uncertainty of what might come after 7 May.

Mr Cameron has said that if the Conservatives get in, the referendum on EU membership will be in 2017, but I hope he does it sooner than that. Two-and-a-half years of uncertainty could be very damaging to UK businesses.”

Mr Berrisford-Smith also called on “leaders across the northern cities” to join together. “I think the challenge for the North is that for devolution to work, you need a big area.

“If you think about London, it’s 33 boroughs. I think you would need a structure similar to that, stretching from Liverpool to Hull and taking responsibility for economic planning and development. I would call it the Trans Pennine Authority.

“You’d need the four big cities — Manchester, Liverpool, Leeds and Sheffield — on board, plus maybe Preston. You would then have a meaningful unit that could attract investment.”