General Election 2017: Sterling dips against the euro as Tories face turmoil in wake of shock election result

This graph shared by Bloomberg news shows the drop in the pound immediately after the exit poll
Eleanor Rose12 June 2017
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The pound has dipped against the euro as the Tories faced turmoil in the wake of a shock general election result.

Sterling plunged on Friday as the UK woke to news of a hung Parliament.

On Monday, the pound stayed stable against the dollar at $1.2736 and dipped slightly against the euro as concerns of political instability mounted.

The euro rated at 0.8806 against the pound.

The dip came as business leaders warned of serious risks to the economy after Prime Minister Theresa May was forced to call on the DUP to cobble together a minority government.

“It is hard to overstate what a dramatic impact the current political uncertainty is having on business leaders, and the consequences could – if not addressed immediately – be disastrous for the UK economy," said Stephen Martin, director-general of the Institute of Directors, in a statement.

Bad week: Prime Minister Theresa May and her husband Phillip arrive at church on Sunday
Stefan Wermuth/Reuters

According to an IoD snap poll, 65 per cent of its 700 members believe current political uncertainty is "a significant concern" for the UK economy.

Mr Martin added: “Business leaders will be acutely aware that Parliaments without majorities are more prone to politicking and point-scoring than most.

"If we do indeed see a minority Government, both sides of the aisle must swallow their pride and work on a cross-party basis on the most important issues."

The pound remained vulnerable as markets wait to see whether Mrs May is forced to resign after hugely disappointing losses for her party at Thursday's polls.

A large Tory majority had been expected with Britain due to enter Brexit negotiations on June 19.

The lack of a majority and Mrs May's diminished authority mean it could be impossible for her to push through controversial measures that do not command the full support of her party, leading some to expect a "softer" Brexit that could even see Britain remain in the single market.

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