Theresa May seals deal to prop up govt, but loses key aides

UK Prime Minister May was clinging to power after losing her parliamentary majority in last Thursday's election, as an agreement with the minority Democratic Unionist Party (DUP) that would keep the Conservatives in power was still not finalised. A spokesman for her office said she would go to Buckingham Palace to ask Queen Elizabeth for permission to form a government - a formality under the British system.

Standing in front of 10 Downing Street, Ms May said her Conservatives and the DUP will work together to "fulfill the promise of Brexit".

With Home Secretary Amber Rudd, Brexit Secretary David Davis, and Defence Secretary Sir Michael Fallon all retaining their posts, there was speculation any reshuffle could be limited to replacing the eight ministers who lost their seats in the election.

He said: "We will look at it in the clear light of day".

Even if a deal is struck, May could struggle to get backing from parliament for her Brexit stance.

Composition: Liberal Party in a minority government, with support of Labour and the Irish Nationalists.

Currently, investors seem to worry that a weakened Conservative prime minister would not have the power to resist calls from some within the party who want a clean divorce from the European Union, even if that means losing privileged access to the European Union single market.

By Friday morning in the United Kingdom, official results had confirmed that no single party had won enough seats to secure an overall majority.

Theresa May has been warned she will have to re-think her Brexit negotiating strategy following her humiliation at the ballot box.

She said: "That is why I think at this critical time for our country it is important to form a government in the national interest".

"The big picture is that political uncertainty could take weeks or months to be resolved and it is likely to weigh on both financial markets (in particular the pound) and the economy", said Paul Hollingsworth, economist at Capital Economics in London.

The sides have until June 29 to secure a deal, but observers fear any concessions to the DUP by May's Conservatives could complicate the talks, deepening the region's political crisis.

Among Tory MPs there was fury at the way a 20-point opinion poll lead at the start of the campaign had been thrown away in an election which she did not need to call for another three years.

That did not help May, who in her previous role as interior minister for six years had overseen cuts in the number of police officers.

"EU did not want #Brexit, but has been prepared to negotiate it since past year", tweeted Siegfried Muresan, spokesperson for the European Parliament's largest grouping, the center-right European People's Party (EPP).

Some senior Tories had made the removal of Hill and Timothy a condition for continuing to support May, who has vowed to remain prime minister.

May's strategy rested on winning the support of former UK Independent Party voters, and the constant media assertion that Labour leader Jeremy Corbyn was unelectable. "That's not a matter for me", she said.

"What tonight is about is the rejection of Theresa May's version of extreme Brexit", said Keir Starmer, Labour's policy chief on Brexit, saying his party wanted to retain the benefits of the European single market and customs union.

"What I've done today is see people from across the party accepting the invitation to be in my cabinet, and crucially I've brought in talent from across the whole of the Conservative Party".

  • Joanne Flowers