London stocks and the British pound have jumped after an election triumph for Conservative prime minister Boris Johnson, that analysts said will bring clarity to Brexit proceedings and unlock stronger economic growth.

Other European stock markets - although lagging buoyant London, which rose over 2% at one point - also powered ahead, supported by confirmation of a partial trade deal between the United States and China.

"Investors might have two early Christmas presents this week: a phase one trade deal between the US and China, and Brexit getting done," said Jasper Lawler, head of research at trading firm London Capital Group.

Mr Johnson, whose governing Conservative Party swept to a decisive win, will now push ahead with Britain's scheduled exit from the European Union on January 31 as he seeks to dispel three years of uncertainty and political deadlock, with a post-Brexit, probably expansionary, budget planned in March.

"The UK general election has provided a clearer path towards a resolution to Brexit and looser fiscal policy, which should boost economic activity and push up sterling, UK equities, and Gilt yields," said Hubert de Barochez, an economist with Capital Economics.

But he also warned that "as long as there remains the possibility of something like a 'no deal', those gains ought to be limited".

European leaders welcomed also what appeared to be an end to Brexit paralysis, but also warned Britain against becoming "unfair competitor".

The sheer scale of yesterday's victory - the biggest Conservative majority since Margaret Thatcher's heyday in the 1980s - sent the pound soaring to an 18-month dollar peak and to highs against the euro not seen since the June 2016 Brexit referendum.

The broader FTSE 250 index, which is more weighted with domestic companies than the FTSE 100 which is dominated by multinationals, surged to a record high.

Investors expressed relief that Johnson roundly defeated main opposition leader Jeremy Corbyn's Labour Party - which had vowed to renationalise formerly state-owned companies.

"The threat to businesses from the Labour policies has been removed and there has been a collective sigh of relief," said Maurice Pomery, founder of trading group Strategic Alpha.

The pound held at elevated levels on Friday but pulled back somewhat from the multi-month peaks forged overnight.

"Further delays to Brexit look unlikely now, meaning households and businesses can plan accordingly. This is exactly why the markets have reacted in the way they have," Forex.com analyst Fawad Razaqzada told AFP by email.

Trade deal, finally?


Global investor sentiment was given another shot in the arm by Beijing and Washington announcing they have reached agreement on a long-awaited trade deal.

China announced a "phase one" trade deal with the United States that includes a progressive rollback of tariffs and the protection of intellectual property rights, but the two sides have yet to sign the agreement.

The announcement came a day after US President Donald Trump tweeted that the world's two biggest economies were very close to a "BIG DEAL" in their protracted trade dispute.

The agreement means the two sides avoid an escalation of the trade war as additional tariffs and counter-tariffs had been due to go into force over the weekend.

Trade tensions between the world's biggest economies have been a huge drag on global growth, with most countries being sucked into the stand-off, sending some into or close to recession.

"A trade deal, if agreed, could alleviate some of the growth concerns," said Razaqzada, adding that "this is a big deal given how important China is to the global economy".

Despite the confirmation of an agreement on a text for the deal, US stocks were down in midday trading on the day US lawmakers took the grave step of approving two charges against Donald Trump, setting up a full House of Representatives vote to impeach the president for abusing his powers and obstructing Congress.