Britain's general election could hammer the pound if voters fail to deliver a majority government to parliament, some analysts have cautioned, while a firm win for Prime Minister Theresa May's Conservative party could boost defence stocks but leave utility company investors out in the cold.

The pound could fall as low as $1.20, analysts polled by Bloomberg predicted, should the snap election result in a hung parliament - the worst scenario of the 11 banks and brokerages surveyed. A hung parliament -- where the winning party doesn't command a majority in the 650-seat chamber --  could complicate or delay Brexit talks. A majority Conservative party government could see the pound top $1.31, a level it has yet to hit this year.

The pound was up 0.3% against a weakened U.S. dollar at $1.2933 at 13:00 BST Wednesday but has gained nearly 3% since May called the snap poll on April 18

HSBC last year declared the currency a "the de facto official opposition to U.K. government" and has experienced greater volatility in the last week of the campaign. However, after this week's general elections comes Brexit negotiations, which could further depress the currency and markets.

A Tory party win could bring political stability to the U.K. and Brexit negotiations, according to Morgan Stanley.

"The decreased risk of a disruptive Brexit, coupled with greater political and positive growth, should help to fuel markets initially," Morgan Stanley Strategist Andrew Sheets wrote in a note. "But the larger the Conservative majority, the higher the likelihood of a hard Brexit, which could temper growth even more."

The OECD Wednesday warned that Britain's economic performance will slow next year as the prospect of a hard Brexit takes its toll on growth and confidence. The Paris-based organization forecast growth in the U.K. to be 1.6% this year, and just 1% in 2018. This is compared to forecast global growth of 3.5% this year and 3.6% in 2018.

There is no doubt that investors are wary given the last time the U.K. went polls, as the currency and markets fell dramatically.

A Tory pledge to cap household energy bills could put utility stocks under pressure. Centrica plc (CPYYY) could be the hardest hit, according to Goldman Sachs. Centrica shares have lost 11.53% in the past three months and 15.46% over the past year. Shares were trading at 198.16 pence in London at 12:53 BST.

Defense stocks, such as BAE Systems (BAESY) and QinetiQ Group (QNTQY) could see a boon from a Tory win, Jefferies analyst Sandy Morris wrote in a note, as they have pledged increased spending.