The labour party takes a beating. Those are pictures of David Cameron arriving back at 10 downing street earlier on. How are the markets reacting . Jonathan guy, you saw the fx moves. Sterling stronger. You see the move here on the bloomberg terminal. Theres the exit poll. The pound surging not just against the dollar, against the euro as well. Heading for the best day since 2009. Dont just call this a tory bounce. This is about certainty. I go straight to one week volatility. The pound against the dollar. You see the expected price swing coming forward. What you see there is the scottish referendum. We outdid that. We went much higher. Then you see the falloff. The certainty is giving sterling a left. In the equity market, much more about policy. You look at the ftse 100, pushing higher. The ftse 250 exposed to those domestic stories putting pushing much higher. The individual stocks tell the story. It is about the absence of labor policy. No rental cap, no mention tax. I look at the banks. No increased bank levies. Lloyds up 6. 3 . Berkeley group loving this news. Up 9. 63 . You see the move in the fx market. Eurosterling is one thing. Cable, quite another. As you recall, the stock reaction, much more about policy. Guy thanks very much indeed. We need to keep you updated on what is happening with the markets. Manus cranny is at the touchscreen. What is the latest . Manus we are at 309 votes and counting. This is how the shape of 2011 britain took hold. The domination of the tories in the heartlands the south of the United Kingdom. They are on target for 329 seats. It was a labor of violation in the area below me, scotland. Lets run you through the numbers. 309 seats for the tories. Where have the labor seats gone . 228. 56 seats to the snp, the Scottish National party. The pollsters were never really quite sure how the percentages would draw down. As we stand, with 25 seats to run on the national level, 36 of the vote goes to the tories 30 of the labour party, and just under 5 of the Scottish National party. Ed balls, born in the same year as myself 1967, he entered the United Kingdom political fray back in 2004, when he went into the westminster position. Lets take you into thats constituency. These are the results. Labour has had the tories took it. 39 of the vote. Have a look at this. That is a much lower turnout than we saw in 2010. That has really taken hold in terms of the news flow. Going back to the map, we talk about scotland, and the whitewash with labor and the Scottish National party. Let me take you into the heart of scotland. Alexander, one of the liberal democrats, he made it clear that he would have a tough job on his hands. This was his constituency. These are how the numbers went. You saw the Scottish National party taking nearly 10,000 more votes from the liberal democrats. Alexander is out. We are seeing the snp exceed the power there. The voter turnout here, lower than we saw in 2010. Voter turnout around 50 . Back in 2010, 74 . Drew henry is the new mp in that area. We will draw to a close on our journey. The interesting fact is this. It is about the southeast of england. We are waiting to hear about nigel farage and whether he will exceed to a parliamentary seat. The critical thing about the reaction coming from ukip is really the swing in the vote. We will come back to that in a moment. As i say, the whole emphasis of the map has been this swing. You hear a lot of people talk about ukip and the votes have moved away from ukip. Bear in mind, they may not have one bank such an exceptional number of seats, but they can me close in number two positions. 390 the tories. 228 to the labour party. 56 seats to scotland. Guy manus cranny on the latest seat count. Judging by the number of tweets coming from victoria and labour party headquarters, anticipation is growing that we could see ed miliband arriving soon. In the meantime, lets talk about David Cameron, set for a second term in power and a majority in the house of commons. The tension will turn to his promise of a referendum on eu membership for the u. K. , a promise he pledged to keep. Prime minister cameron we should never dodge the big issues, whether it is dealing with our deficit, holding that referendum which we were right to hold on the future of scotland, or in the future, that referendum we must told to decide britains future in europe. Guy David Cameron now at downing street. Thats where we find Ryan Chilcote as well. Walk us through the rest of the day from David Camerons perspective. Ryan the british Prime Minister will head to Buckingham Palace. That is where he will meet the queen. That kicks off the Prime Ministers job of forming a new government. If polls are right it will be a majority government. It will be a conservative government. Thereafter, very important you heard from the Prime Minister, talking about the Eu Referendum. The biggest challenge is to prepare the u. K. For a referendum. This is something that David Cameron probably didnt want to do, but proposed having as a response to some of the more nationalistic sentiments in the country leading up to the election. He first will go to brussels, no doubt, and say, we need to renegotiate our relationship with you. You need to give us a very good deal. We are going to have a referendum as he reiterated, by the end of 2017. I need to go back to my electorate with some concessions whereby they are comfortable staying within the eu. Not just the electorate. Theyre all those backbenchers the members of his party that think the conservative party, the United Kingdom should not be part of the European Union. That is a challenge for David Cameron. He had a huge mandate in this election, beyond anything he could have hoped for. That doesnt mean it is going to be an easy five years. Guy ryan, i guess we are trying to figure out when that referendum will come. A lot of people questioning whether it is as late as 2017. Someone argue that maybe cameron acts early delivers some of the big choices he wants to make early in the political calendar for the next parliament. Ryan his commitment is to hold it by the end of 2017. But you are right, he is going to want he doesnt want the u. K. To exit the European Union. Is going to try to time the referendum and control the wording of the referendum in such a way that the chances are least that that will happen. He has reiterated his commitment to that and now he has to stage manage the whole process. Guy thank you very much indeed, Ryan Chilcote from downing street. Lets figure out what this all means for the eu and the u. K. s relationship with the eu. Lets go to brussels. The heart of this story. Ian what kind of reaction can we expect . What will be the view from brussels, berlin, and paris . Surprise. They were following the opinion polls like the rest of us. What does cameron without the moderate libdems mean . I think they are going to be glad that the uncertainty is over. More than anything, they are not going to give cameron everything he wants. Guy do you think the view in berlin will be different to the view in brussels . Ian i do. The European Commission is a protector of the european treaty. The founding principles of the eu, such as freedom of movement of people which cameron wants to negotiate on, they protect that. Angela is more of a pragmatist. She sees the benefits of the u. K. In the eu. She sees what an open trading country like britain can do to the rest of the eu countries. I think cameron can see berlin as a bit of an ally in this. There are shades of gray. It is not black and white. Guy interesting to put the greek story into the mix as well. That may reorient the priorities. Thank you for your time this morning. I want to take you to some live pictures. We are going to take you down to live pictures from outside the labour party headquarters. We are anticipating that ed miliband will be arriving very shortly. He made his way down from his constituency, down into the heart of the westminster story now as he tries to figure out his political future. Hes lost one of his closest colleagues, and walls ed balls losing his seat about an hour ago. His future very much in doubt this morning. Guy welcome back to Bloomberg Politics. We are live from london. Let me walk you through some of the key top stories. Syngenta has rejected a 45 billion takeover offer from monsanto. Syngenta says the offer undervalues the company and a merger would carry significant execution risks. U. S. Nonfarm payrolls are due at 1 30 p. M. U. K. Time today. They are expected to show 230,000 jobs added in april. That follows the smallest rise in more than a year. And, the chief executive of lafarge has said he is very confident that talks with shareholders will approve the merger as hpolcim shareholders are due to vote on the deal. Lets get back to the u. K. Story. The big story for markets this morning is what happened overnight in the United Kingdom. The conservatives look like they are able to secure a majority which is significantly different from what the polls were predicting. Equities have popped. Sterling has risen. I think the story starts to get more nuanced now, doesnt it jon ferro . Jonathan i think each individual asset class had a different story. The equity market is about policy. No labor policy, good pop for the house builders, banks, and bookies. Sterling, much more about certainty. You see the volatility dropping off. Going into the jobs number for cable, i think that is pretty punchy. The guilds moved. Yields were lower. This one is interesting for me. Going into what could be a majority, that is a conservative government that can tighten up fiscal policy, push through cuts. It means the bank of england could keep things looser for longer. In a fixed income market, this is where the big debate is. Equities much more obvious. The gilt market, some nuances. Guy and what youve seen is the gilt market softening a little bit. We were down 8, 9, 10 basis points. We are now a little bit firmer on price. I also wonder how quickly the market is going to move from the euphoria on the trading floors that weve seen overnight to a point at which they think, what discount do i need to apply for this Eu Referendum . Jonathan the rally is like holding a beach ball under the sea. I was having a coffee downstairs with francine lacqua. She will be on the air later. She said to me that they may have to bring that referendum forward. Francine has a good point. They do have to bring that referendum forward and get rid of that all uncertainty. That is another thing to think about going forward. Guy may be some more uncertainty being cleared up. The bbc is saying that the labour party leader, ed miliband, will resign. You are looking at live pictures of what appears to be the floor somewhere in victoria just west of westminster. This is where the u. K. s labour party has its headquarters. Ed miliband making his way down towards labour party headquarters. After such a significant disappointment, your heart must go out to him from the point at which the polls were saying, there he is. He is just beginning to arrive. Actually these arent live pictures. Those are pictures earlier on. The polls were really pointing jonathan the pollsters were quite clearly way worse at their jobs than some others. Maybe a little bit more credit to the city of london. When we look at the politics and strip out the noise, everyone will say, the winner must have run a good campaign, the loser must have run a bad campaign. If you look at the labor campaign, they did a fantastic job of convincing part of the u. K. That every job was a zero at contract. They did a brilliant job of taking this u. K. Recovery and twisting it into maybe something it wasnt. I dont think you can do this by binary winnerloser. Guy we will leave it there. Thank you very much indeed. Bbc reporting that ed miliband will step down as leader of the labour party. Lets talk about the Market Reaction again. Jasper joins us from cmc markets. We are through the bounce, the initial euphoria that the markets seem to have priced in. Sterling pops higher. Now, as you start to think about what happens next, how different do you think the market story evolution looks . Jasper i think thats the big thing here. Weve seen a massive reaction in u. K. Stocks. That sort of makes sense to some degree. U. K. Stocks have been underperforming. European equities have been bolstered by qe in the eurozone. Are u. K. Stocks about the catch up . They need to hold onto these gains. The ftse 250 is near record highs. The ftse 100 really close. This could continue some strong gains for the market. Guy do you think there is going to be a significant discount applied to the biggest stocks with relation to this possible referendum now becoming less possible, more likely for the u. K. . Jasper i think some of the players that have done well today are the more interestbearing the likes of utilities and so forth. We are in a low Interest Rate environment. These stocks have been held back by some of the threats of the policies under the labour manifesto and are popping higher today. I think there is more room to go. Some of these more stable names particularly high dividend players, are going to look rosier than they did previously. Guy jasper, thank you for the update. I want to take you out into the break with a live shot coming from victoria, outside labor party headquarters. We are awaiting the arrival of ed miliband. As soon as we get those shots we will bring those pictures. In the meantime, we will take a break. Guy welcome back. Let me take you back to victoria. We are all waiting the rival of ed miliband. We are anticipating that we will see him step down as leader of the labour party. We are also looking at leadership questions surrounding the libdems. All of that expected to maybe wrap up today. It is going to be an interesting day. Let me tell you what weve got coming up. Plenty more market coverage. The focus right now is british politics. And the referendum we could see. We will speak to the founder of gml a man who actually is fairly in favor of this referendum being part of our Political Landscape. What does he make of this referendum threat to British Business . We will talk that through with him very shortly. See you in a moment. Just because im away from my desk doesnt mean im not working. Comcast business understands that. Their wifi isnt just fast near the router. Its fast in the break room. Fast in the conference room. Fast in toms office. Fast in other toms office. Fast in the foyer [pronounced foyyer] or is it foyer [pronounced foyyay] . Fast in the hallway. I feel like ive been here before. Switch now and get the fastest wifi everywhere. Comcast business. Built for business. Guy welcome back to Bloomberg Politics. Go we are here in london. Im guy johnson. Let me talk you through the top stories. Syngenta has rejected a 45 billion initial takeover from monsanto. Syngenta said the offer undervalued the company and the merger would carry significant execution risks. Billion early caching attracted investors from canada and the uae for the hutcheson o2 acquisition that creates the largest wireless carrier in the u. K. And weve had more evidence overnight of chinas economic slowdown. Exports declined in april and imports slumped. Overseas shipments fell from the yearearlier. That some of the top corporate and economic stories. Let me take you to the political story, which is centered on the u. K. One of the big elements of that story happening in scotland, where Tom Mackenzie is standing by. Tom over to you. Tom thank you. A Seismic Shift in the Political Landscape in scotland. 56 seats out of 59 for the Scottish Nationalist party and one each to the liberal democrats, conservatives, and labor. To get a good sense of what has fed into this shift in scottish politics, im joined by dr. Mark shepard. Thank you for your time. What is your take on what has happened here which is quite incredible . It has been building over a number of years. In 1992, the conservatives had a majority only 25 of the vote here, it is worse now. Theyve got 15 . We have seen that overtime. Everyone thinks they cant do it at westminster, but the referendum changes that. We get a sizable turnout. You get a mobilization of support, and the organization is there, the membership is there lots of Ground Troops the young people interested. Certainly a little bit more left wing. Overall, labor and the snp are quite similar in scotland but the perception was the snp were more old labor than labor. Tom what does it mean for labor . Can they rebuild . It is difficult. Scottish labour didnt want to have jewish mps. They are trying to do things differently. But i dont think they can do things differently enough. Theyve got to try and please the labor voters in scotland. It is a difficult divide. Tom the snp go down to westminster with 56 mps. They have to please their voters as well. They face a challenge. They dont have the labour party to work with. It is going to be the tories. How will they pull it off . Theyve said they are going to be a strong voice for scotland. I think the current position there must be Something Like a constitutional convention. I cant believe that the current proposals will stand. There will be added pressure, given the mandate in scotland. I think the labour party and the conservatives should have done this a long time ago. Theres only two ways to save the union, federalism or independence. The liberal democrats have got a solution, which is federalism. They need to be thinking about federalism and a way of doing this. There needs to be a constitutional convention. It wont please the electorate up here. Weve got 2016 coming. The s p you could say, doesnt have much power. Bu