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What The Election And Theresa May's Deal Mean For The UK

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What The Election And Theresa May's Deal Mean For The UK
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The United Kingdom held a national election on Thursday and the results were shocking. Prime Minister Theresa May called for a snap election earlier this year with expectations of boosting the Conservative's majority government but her party failed to secure the 326 seats needed to form another majority government.

However, the Democratic Unionist Party, the largest unionist political party in Northern Ireland, said it is open to form a government with the Conservatives without the need for a formal coalition deal. The Northern Ireland party would will provide the necessary support and votes in the House of Commons.

The DUP said its main motivation is to prevent the Labour's Jeremy Corbyn from becoming Prime Minister. The party's leader, Arlene Foster, slammed Corbyn and said ahead of the election, "He hasn't condemned IRA for the violence they visited upon people in everyday lives."

"While Theresa May is well within the political mainstream and proven to be a solid and reliable unionist, Jeremy Corbyn is beyond the pale," the leader also said.

Brexit And Pound

May said that her new minority government remains determined to "guide the country through the crucial Brexit talks," which are scheduled to begin in 10 days.

The DUP party traditionally held a "euroscpetic" stance and backed the Brexit vote. However, the people of Northern Ireland rejected Brexit with a 56 percent vote against leaving the European Union, creating added difficulty to any Brexit negotiations.

Meanwhile, the British pound was trading lower by more than 1.50 percent heading into Friday's U.S. equity trading session but was lower by more than 2 percent earlier in the morning.

"Theresa May's electoral gamble has catastrophically failed," Tom Stevenson, an investment director at Fidelity International told UK-based Independent. "The market reaction to this unwelcome outcome is likely to hit UK shares, bonds and the pound. Markets will likely remain on the back foot while the difficult job of putting together a workable government is undertaken."

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Image Credit: By Jim Mattis - 170511-D-GY869-0152, Public Domain, via Wikimedia Commons

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