Pound dives as Britain thrown into uncertainty by shock vote

London : The pound plunged two percent Friday as Prime Minister Theresa May lost her majority in Britain's general election, fuelling political uncertainty just days before the start of Brexit talks.

May had called the snap vote in a bid to boost her party's hold over Westminster and give her a stronger hand in talks with EU leaders over the country's detachment from the bloc.

However, the leftist Jeremy Corbyn's Labour Party slashed the ruling Conservatives' lead, leaving the country with a hung parliament and political instability for the second time in seven years.

The pound dived from $1.2959 to $1.2674 after it was confirmed the Conservatives had lost their majority. It also sank almost two percent against the euro.

However, London's FTSE 100 opened 0.7 percent higher as the weaker pound helps international firms listed on the index.

Craig Erlam, London-based senior market analyst at OANDA, said: “A hung parliament is the worst outcome from a markets perspective as it creates another layer of uncertainty ahead of the Brexit negotiations and chips away at what is already a short timeline to secure a deal for Britain.”

The outcome will throw Britain once again into upheaval less than a year after the country's decision to leave the EU, which led the pound to collapse about 15 percent against the dollar between June and October 2016.