May’s Future in Danger as Brexit Election Gamble Backfires

By Bloomberg

Theresa May’s future as Britain’s prime minister was thrown into doubt after her gamble to call an early election backfired spectacularly just 10 days before Brexit negotiations are due to start.

May’s Conservative Party was on course to win 316 seats, the BBC forecast, down from the 330 she held before calling the snap election seven weeks ago. That’s short of the 326 seats she needs for an overall majority. Jeremy Corbyn’s Labour Party will win 265 seats, compared with 229 before the election, according to the BBC’s projections.

May signaled that her party will try to form a government after being re-elected to her seat amid speculation that she will now have to resign.

“At this time, more than anything else, this country needs a period of stability,” she said in Maidenhead, west of London, her voice at times shaking. “If, as the indications have shown, the Conservative Party has won the most votes and the most seats, it will be incumbent on us to ensure that period of stability and that’s what we will do.”

The pound slumped to the lowest since April as investors fret about another spasm of political turmoil less than a year after Britain voted to leave the European Union. May called the election expecting to win a landslide but the result will be a huge blow to her personal authority even if she scrapes a majority. The Conservatives, already ill at ease after a gaffe-prone campaign, will ask how she could squander the commanding lead that she enjoyed at the start of the campaign.

German Chancellor Angela Merkel and French President Emmanuel Macron will also wonder who they will end up negotiating with when Brexit talks finally get under way.

The pound dropped as much as 1.9 percent before recovering some of those losses to trade at $1.2764 at 3:41 a.m. in London.

Lost Support

“The prime minister called the election because she wanted a mandate, the mandate she’s got is lost Conservative seats, lost votes, lost support,” Corbyn said after retaining his seat in north London. “That’s enough to go.”

The Scottish National Party is on course for 34 seats, down from 56 in 2015, and the Liberal Democrats may get 13, up from 8, the forecast showed. In Northern Ireland, the Democratic Unionist Party won 10 seats and the Irish Republican party Sinn Fein won 7 seats.

May also tried to exploit terror attacks on Manchester and London to expose Corbyn’s perceived weakness on security and his past associations with supporters of the Irish Republican Army.

“She needs to consider her position,” said Anna Soubry, an anti-Brexit Conservative lawmaker. “It’s a dreadful night. I’ve lost some remarkable friends.”

Big Brexit Questions

The election throws up major questions about Brexit. Talks with EU leaders are due to start in less than two weeks and those meetings may now need to be delayed, further eroding the time that Britain has to clinch a deal before it leaves the bloc in March 2019.

It will also be difficult for the next prime minister — whether it’s May or someone else — to argue that they are speaking for the entire nation after such a bitter and divisive campaign.

If the Conservatives retain power, the Brexit agenda will likely be set by lawmakers who campaigned for the cleanest break with the EU. That would limit room for May or her successor to make concessions, increasing the risk Britain crashes out of the bloc.