Pound sees biggest single-day gains in a decade on election result

The City reacted positively as the Conservatives romped home to the biggest majority since 1987 but warned clarity was now needed on the future relationship between the UK and the EU.

Bosses and trade bodies also called on the Government to end “arbitrary negotiating deadlines”.

On the currency markets, which remain open 24 hours a day, the pound enjoyed its best gains in a decade, with the FTSE 100 expected to also open up.

At 7am, the pound was up 2.1% against the dollar to 1.345 and up 1.29% against the euro, nudging close to 12-month and 31-month highs respectively, having hit and remained at the highs from within the first hour of the exit poll’s release.

Neil Wilson, chief market analyst at Markets.com, said: “For the markets and for business this is the perfect result – a clear majority for the Tories, the Corbyn risk nullified entirely, a major reduction in uncertainty around Brexit and even a quick Budget to inject the economy with some added impetus.

“The only doubts are around the next phase of Brexit – the future relationship – but with a large majority the government will be in a better place to negotiate and do what it needs to do.”

Jasper Lawless, head of research at LCG, added: “Last night was the knee-jerk speculative response to the election but we think there is more room to the upside for Sterling.”

Business groups also reacted positively, pleased that the nationalisation plans proposed by the Labour Party failed to win enough votes, but also called on Mr Johnson to provide more details on the UK’s future trading relationship with the EU.

Jonathan Geldart, director general of the Institute of Directors, said: “After years of parliamentary chaos, directors want to see a Government that is clear-sighted about the challenges facing businesses, and ambitious, but realistic, in its response. British companies have been resilient amid the confusion, but they are eager for some clarity now.

“Business leaders’ thoughts will immediately be turning to Brexit. For directors, ‘Get Brexit Done’ will only have meaning once the details of our long-term future relationship with the EU are clear, they need a framework to plan for the future from.

“The Prime Minister must resist the urge for arbitrary negotiating deadlines and should commit to a proper adjustment period that starts when businesses know the full detail of what changes they may be facing.

“Our members have made clear that the content and shape of any new deal are much more important than simply the speed in getting there.”

Carolyn Fairbairn, CBI director-general, added: “The starting point must be rebuilding business confidence and early reassurance on Brexit will be vital.

“Firms will continue to do all they can to prepare for Brexit, but will want to know they won’t face another no deal cliff-edge next year. Pro-enterprise policies on immigration, infrastructure, innovation and skills, will help relaunch the UK on the world stage.”