ELECTION LIVE: Pound and FTSE 100 surge as Conservatives sweep to general election landslide
Sterling makes up some of the ground it lost after 2016 EU referendum results and FTSE 100 opens 1 per cent up
Markets have given an emphatically positive reaction to the Conservative party's landslide victory in the UK general election.
Buoyed by an exit poll which predicted a Tory majority of around 80, the pound surged through the 1.20 barrier against the euro, a three-year high, and 1.34 against the dollar, a 19-month high. It fell back a little during by late afternoon. The FTSE 100 closed at 7353.44, up 1.1 per cent on the day.
With all seats declared, the Tories have 365 seats (up 66) with the Labour party on 203 (down 42). Labour leader Jeremy Corbyn has said he will not lead his party into the next election and Liberal Democrat leader Jo Swinson lost her East Dunbartonshire seat.
It was also good news for the Scottish National Party, which took 48 seats, up 13. It is thought to be Labour's worst result since 1935.
Speaking in central London, Tory leader Boris Johnson said: “As the nation hands us this historic mandate we must rise to the challenge and to the level of expectations."
He added: “Parliament must change so we in Parliament are working for you the British people."
This follows several days of traders hedging against the pound after the final opinion polls on Tuesday indicated that the election could be a close call.
The currency has clawed back some of the ground it has lost since its significant fall after the EU referendum in 2016 when it was worth $1.50.
The Conservative party’s large majority pleased forex traders as it signals the end of a period of political uncertainty in the UK. Johnson clearly has the numbers in parliament he needs to pass the first reading of the Brexit withdrawal agreement on January 31.
The party saw its vote rise significantly in areas that voted leave in the EU referendum in 2016, such as in the North East and the Midlands. It picked up seats such as Blyth Valley, Wrexham and the Vale of Clywd, which have been solidly Labour for decades.
In the country's financial heart, London, Labour managed to repeat its strong performance in the 2017 election, holding on to key constituencies like Battersea, as well as winning Putney from the Conservatives.
For Labour, the Shadow Chancellor John McDonnell said it looked like an "extremely disappointing" result for his party.
"I thought it would be closer. I think most people thought the polls were narrowing," he said. He added that he thought that the issue of Brexit had dominated the campaign.
Labour’s leader Jeremy Corbyn confirmed he will stand down and that a new leader would be elected after a period of reflection.
Boris Johnson’s biggest problem could be stemming calls for a second referendum for Scottish independence. The Scottish National Party will be further enboldened after winning almost all of the nation’s seats.