NEW YORK (TheStreet) -- Thursday's contentious general elections in the U.K. remain too close to call, but in the end, both of the U.K.'s leading parties have something to lose.

"It's pretty clear we will see a coalition government," said Bill Adams, senior international economist with PNC Financial Services. "The larger parties will have to make concessions to smaller parties to keep the government together."

The current prime minister, the Conservative Party's David Cameron, is running against Labor Party Leader Edward Miliband.

If the conservatives win, the minority partner to the government will likely be the U.K. Independence Party, which is seeking a referendum to have the U.K. leave the European Union.

"That would be a huge change for British economic policy, it leaves this open question as to whether London will still be the capital of finance in Europe," Adams said. "I think once the specifics of how large that change would be for the British economy comes into focus, people will step back from the brink."

If the Labor Party wins, it will likely have to partner with the Scottish National Party, which held a referendum less than a year ago seeking independence for Scotland.

"They want a more federalist system in the U.K., which would also be a huge change for how the British government and economy work," said Adams.

The isolationism that has surfaced in the U.K. once again highlights the challenges facing the European Union, which has already had to contend with Greece's financial difficulties.

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