Theresa May's shock defeat: Pound likely to sell-off further; UK bond prices may surge

The prospect of hung parliament paints a picture of the UK administration not in complete control

Theresa May’s gamble didn’t pay off. She had hoped that a resounding election victory and an increased majority in the House of Commons would give her the mandate to pursue her own political agenda and, in particular, strengthen her hand in negotiations to secure the United Kingdom’s withdrawal from the European Union (EU).

But those plans are in tatters and instead, slightly less than a year after the country voted to leave the EU, the United Kingdom has been plunged into further political uncertainty.

We expect the pound to plummet and gilt yields to decline as investors embark on a so-called flight