Conservatives sweep to victory

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The election has transformed the country's political landscape, triggering the resignations of three party leaders - Labour's Ed Miliband, the Liberal Democrat chief Nick Clegg and Nigel Farage of the UK Independence party - and claiming the scalps of a swath of senior politicians who have dominated Westminster for a decade.

Dejection in the ranks of Labour and the Lib Dems contrasted with the jubilation among Conservatives, who have won their largest tally of seats in more than 20 years, and the Scottish National party, which swept the board in Scotland and overnight became one of the UK's most powerful political forces.

With all seats declared, the Conservatives have won an overall majority with 331 seats - a far better result than senior Tories had imagined possible.

After meeting the Queen at Buckingham Palace, the prime minister returned to Downing Street where he struck a conciliatory tone, saying the Conservatives would govern as "a party of one nation". He also promised Scotland the "strongest devolved government anywhere in the world" with wide powers over taxation.

Labour won just 232 seats in its worst election result since 1987 - a crushing disappointment for Mr Miliband, who had believed he was on the brink of power.

He told supporters he was stepping down because the Labour party needed an "open and honest debate about the right way forward".

Mr Miliband said he was "truly sorry" he did not succeed as Labour leader but would "never give up" fighting for the Britain he believed in. "The course of progress and social justice is never simple and straightforward," he said.

Mr Clegg, who served as deputy prime minister in the coalition, quit as Lib Dem leader after the party saw its tally of seats plunge from 57 to eight, winning only 7.8 per cent of the popular vote. He said the results were "immeasurably more crushing and unkind than I can ever have feared".

The party's most high-profile casualties included Vince Cable, business secretary, former leader Charles Kennedy and Simon Hughes, a former deputy leader.

The FTSE 100 was up 1.7 per cent, or 119 points, in early afternoon trading led by energy and banking stocks - two of the sectors that would have been vulnerable to increased regulatory scrutiny and a higher tax burden under a Labour government.

Centrica, the owner of British Gas and one of the UK's main energy providers, led a rally on the FTSE, rising 7.4 per cent to 276.5p. Royal Bank of Scotland was one of the best-performing financial stocks, up 6 per cent at 352p.

Labour won 30.5 per cent of the national vote, a 1.5 percentage point increase on its share in 2010. The party's huge losses in Scotland more than wiped out its modest gains in London and elsewhere.

In a final humiliation for Labour, Ed Balls, the shadow chancellor, and one of the leading Labour politicians of his generation, lost his seat of Morley and Outwood to the Tories by just 422 votes. "I feel sorrow about the result that Labour has achieved not just in Scotland but across the country and I have concern about the future," he said.

The UK Independence party suffered a devastating blow when its charismatic leader Nigel Farage lost to the Conservatives in South Thanet, failing at his seventh attempt to enter parliament. Mr Farage quit as Ukip leader, offering another cause for Tory celebration.

His party was projected to win about 13 per cent of the popular vote, but the UK's first-past-the-post electoral system meant Ukip was only likely to return one MP.

The number of Tory MPs elected reflected the Conservative strategy of carefully targeting key seats, with the party's share of the national vote at 36.9 per cent, a 0.8 percentage point increase from 2010.

Currency markets reacted swiftly to the prospect of a Conservative government, with sterling up 1.8 per cent against the dollar to $1.5513 and gaining 2.2 per cent versus the euro.

Manny Roman, CEO of Man Group, the UK's largest hedge fund, said: "A clear outcome and a level of continuity is certainly a positive thing for the UK economy, and the City will no doubt welcome what is expected to be a more business-friendly environment."

General election: The night in pictures But the other big story was the Scottish National party surge, which swept away Labour and the Lib Dems. The SNP's strong finish could embolden it to push for a second independence referendum.

The nationalists won 56 of 59 Scottish seats, prompting Alex Salmond, the party's former leader, to declare: "The Scottish lion has roared this morning."

The poll has exposed deep divisions in the UK, with Scotland turning to a leftwing, separatist party and England choosing Mr Cameron's centre-right Tories. Mr Salmond said Mr Cameron no longer had "legitimacy" in Scotland.

The election could herald a further loosening of the ties that hold the UK together. Boris Johnson, London mayor and newly elected Tory MP for Uxbridge, suggested Mr Cameron would move to create a more federal UK. "There has to be some sort of overall offer," the London mayor said.

In the end, Mr Cameron and his campaign were vindicated. But with Scotland appearing to pull away from the union and with the Conservatives' promised referendum on EU membership looming, the prime minister's toughest work may lie ahead.

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