UK election ends in hung parliament; PM May's gambit badly backfires

• U.K. General Election ends in hung parliament.
• PM May's ruling Conservative party is forecast to win 318 seats and has lost its parliamentary majority.
• May says the Conservatives will form a government with DUP to "provide certainty".
• Speaking outside Downing Street, the prime minister confirms Brexit talks will stick to the existing timetable.

With almost every seat accounted for in the General Election, no party has gained a clear majority and the U.K. is now faced with a government with a weakened majority.

By 11 a.m. May's ruling Conservative party had won 318 seats — eight seats short of a majority — while the opposition Labour Party led by Jeremy Corbyn had 261 seats. Meanwhile, the Scottish National Party had won 35 seats, the Liberal Democrats were at 12 and the Democratic Unionist Party had 10. Voter turnout was at 68.7 percent, according to the BBC.

Despite the bruising election result for her Conservative party, which previously had a 17-seat majority, U.K. leader Theresa May said she would form a new government in order to "provide certainty" and make sure the country is "safe and secure".

Having faced calls to resign, May's Conservatives and the DUP (Democratic Unionist Party) are poised to work together in parliament. Speaking outside Downing Street on Friday afternoon, May insisted Brexit negotiations would stick to the same timetable as before.

"What the country needs now more than ever is certainty. Having secured the largest number of votes and greatest number of seats in the General Election, it is clear the Conservatives and Unionist party has the legitimacy to provide that," May said.

Investors aren't thrilled about that situation as passing legislation can be difficult with two parties that each hold strong political priorities. The political deadlock is also expected to hurt upcoming Brexit negotiations as well as May's political future, according to strategists.

"We have seen two dramatic political miscalculations by two Conservative (U.K.) PMs in a short time span, it's incredible," said Heather Conley, director of the Europe program at the Center for Strategic and International Studies.

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The British pound dropped sharply in Asian trade on Friday and slipped below the $1.27 handle to fresh multi-month lows. For Friday's session, it is now down around 1.6 percent against the dollar, trading at $1.2737 at 11:00 a.m. London time and continuing to fluctuate.

Jeremy Corbyn, leader of Britain's opposition Labour Party, speaks at his closing election campaign rally in London, June 7, 2017.

Clodagh Kilcoyne | Reuters

'May should step down'

After winning his seat back in Islington, North London, early on Friday, 68 year-old Corbyn called for May to step down. "People have said they have quite enough of austerity politics," he said in a speech. "The PM called this election because she wanted a mandate. Well, the mandate she's got is lost Conservative seats, lost votes, lost support and lost confidence."

Later on Friday morning, the left-wing Labour leader said he believed Brexit talks must go ahead on June 19 despite the inconclusive election vote. Corbyn told Sky News, "(Talks) are going to have to go ahead because Article 50 has been invoked, the government in office in 11 days' time will have to conduct those Brexit negotiations."

In a speech on Friday, May said it would be incumbent on her party to offer stability if Conservatives win the most seats. The Conservative leader is expected to deliver a statement at around 10 a.m. London time amid reports that she will not step down as leader.

SNP leader Nicola Sturgeon, meanwhile, called the early results "disastrous" for PM May and expressed disappointment over the SNP's performance, Reuters said.

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'A big miscalculation'

On April 18, PM May surprised onlookers by calling a snap election — a decision aimed at strengthening her mandate to see the country through a hard Brexit. At that point, the Conservatives were polling ahead of Labour but as the campaign progressed, the polls narrowed sharply.

The Conservative campaign attempted to focus on the withdrawal from the European Union, repeating a mantra that only it can offer a "strong and stable" government as negotiations with Brussels heat up. Corbyn has said he will honor the U.K.'s decision to leave but he's widely expected to push for a soft Brexit and retain the benefits of the single market, a tariff-free trading bloc for EU members.

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