After the most difficult night of her political career, U.K. Prime Minister Theresa May vowed to form a weakened majority government on Friday. President Donald Trump called the results "surprising."
He did not elaborate.
None of the U.K.'s political parties came out of Thursday's election with an overall majority. Despite the bruising result for her Conservative Party, May on Friday sought permission from the queen to enter Parliament together with the Democratic Unionist Party.
The election was a disaster for the Conservatives and May, who voluntarily sent voters to the ballot box early, thinking they would build on the Conservatives' existing parliamentary majority. Instead, they lost their majority and now have to cobble together a coalition government with a right-wing party from Northern Ireland.
Making matters worse, the shock result plunged one of America's closest allies and a critical trading partner into uncertainty just 10 days before the U.K. enters very complex and high-stakes talks over its "Brexit" from the European Union.
The Conservatives remain Britain's largest party, but May's failure to secure an overall majority could put her alliance with Trump to the test. It also seriously depletes her own political power.
"The result is a major embarrassment for May, who called the election just a few weeks ago on the back of a commanding 20-plus poll lead," Kallum Pickering, senior U.K. economist at investment bank Berenberg, said in an email to CNBC.
Tough times for the 'special relationship'
May has voiced concerns about some of Trump's hard-line views — and Trump is intensely disliked in the United Kingdom — but the Tory leader recently reaffirmed her commitment to maintaining the U.K.'s "special relationship" with the United States.
May's political standing and Britain's economic health are especially important for the United States now, when so much of the rest of America's alliance with Europe is on the ropes. Trump has openly attacked Germany — he famously said that country is "very bad" for the United States — and the U.S.-Germany relationship is in its worst state since Germany reunified in 1990.
Trump has spoken with open contempt for the European Union and the NATO military alliance, and he has professed admiration for Russian President Vladimir Putin at a time when much of the rest of the Western world sees him as tremendous threat.
May's willingness to set aside political differences with Trump was perhaps most fittingly captured when she was photographed holding hands with the president in her first state visit to Washington.
May pledged on Friday to continue in her role as prime minister, but speculation has intensified as to who could potentially replace the Tory leader.
"It is impossible to imagine May's MPs allowing her to lead the party into another election. Her hopes of implementing her domestic reform agenda have turned to dust," said Mujtaba Rahman, Europe director of the Eurasia Group, a political risk consultancy.
"The front-runners to succeed her, possibly by acclamation, would be (Brexit minister) David Davis, (U.K. Foreign Secretary) Boris Johnson and (Home Secretary) Amber Rudd," Rahman said.
U.K. bookmakers slashed the betting odds for Johnson to replace May as prime minister from 66-1 to 5-1 on Friday morning as the election results filtered in. Johnson also appeared to fuel the rumors when reporters asked whether he was supportive of the prime minister on Friday — he said it was still "early days."
Johnson would appear to be a good fit with Trump. Should Johnson become prime minister, the U.S. president could probably expect an amiable relationship similar to the one he has enjoyed with May. After Trump was elected, Johnson reversed his position on the Republican and said he was "excited" about the Republican's presidency. (Previously, he said Trump suffered from a "stupefying ignorance" that made him "unfit for office.")
The Foreign secretary recently argued he could not see any reason for Trump's upcoming visit to the U.K. to be canceled, despite a new furor over the president's tweets attacking Sadiq Khan, the mayor of London, after the deadly terror attack in the city, the third in the U.K. in less than three months.
