The City reacted positively as the Conservatives reached the biggest majority since 1987 but warned clarity was now needed on the future relationship between the UK and the EU.

At 7am, the pound was up 2.1% against the dollar to 1.345 and up 1.29% against the euro, nudging close to 12-month and 31-month highs respectively, having hit and remained at the highs from within the first hour of the exit poll's release.

UK-focused companies listed on the London Stock Exchange enjoyed some of their biggest ever surges following confirmation that the Conservatives have won the General Election.

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Businesses had spent most of the last three years in a state of limbo due to the political and economic uncertainty.

Investors appeared convinced that the election result will bring stability.

The listed banks were some of the biggest gainers in early trading, with Virgin Money, Royal Bank of Scotland, Lloyds Banking Group and Barclays all soaring.

Royal Bank of Scotland - which remains majority owned by the taxpayer - was the biggest riser, with shares up 11.3% or 26.2p to 258.5p.

It helped the FTSE 100, made up of several international giants, climb 1.5% or 112 points to 7,386.

The FTSE 250, which has more UK-focused businesses, jumped 4%.

Neil Wilson, chief market analyst at, said: "For the markets and for business this is the perfect result - a clear majority for the Tories, the Corbyn risk nullified entirely, a major reduction in uncertainty around Brexit and even a quick Budget to inject the economy with some added impetus.

"The only doubts are around the next phase of Brexit - the future relationship - but with a large majority the government will be in a better place to negotiate and do what it needs to do."

Jasper Lawless, head of research at LCG, added: "Last night was the knee-jerk speculative response to the election but we think there is more room to the upside for Sterling."

Business leaders said the new government needs to rebuild confidence in the economy and bring stability to industry following the Conservatives' comprehensive victory in the General Election.

Carolyn Fairbairn, director general of the CBI, said: "The starting point must be rebuilding business confidence, and early reassurance on Brexit will be vital.

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"Firms will continue to do all they can to prepare for Brexit, but will want to know they won't face another no deal cliff-edge next year.

"Pro-enterprise policies on immigration, infrastructure, innovation and skills, will help relaunch the UK on the world stage."

Jonathan Geldart, director general of the Institute of Directors, said: "We must now see progress on the challenges that have been holding the economy back, from skills to infrastructure.

"Many directors will be waiting for action on manifesto commitments such as incentives for R&D investment and business rates reform.

"Meanwhile, there are still big question marks around the Conservatives' plans on immigration and big-ticket infrastructure projects."

Federation of Small Businesses chairman Mike Cherry said: "Small business owners will be hoping that today's result helps to bring stability back to the economy.

"After more than three years of Brexit absorbing government bandwidth, the Conservative Party has pledged to tackle the many domestic challenges that have been neglected during that time."

Union leaders said the election result was "devastating" but the Prime Minister was warned to expect the "shortest honeymoon ever".

TUC general secretary Frances O'Grady said: "After nine years of failed austerity, the pressure is now on the government to boost living standards and inject real investment into our NHS and public services.

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"There are no more excuses for Boris Johnson on Brexit. In the year to come, he must deliver a deal with the EU that protects jobs, rights at work and peace in Northern Ireland.

"Now more than ever, working people need to stand together in their unions and get ready to fight to protect our livelihoods and our communities."

Manuel Cortes, leader of the Transport Salaried Staffs Association, said: "Last night was a devastating result for our party. There is no point in making excuses for such a comprehensive defeat.

"We start working extremely hard from today to build an electoral platform which will reconnect with all of those who did not support us."