The FTSE 100 opened over 1% lower this morning as the jubilation over a Tory victory wears off in the City.

The FTSE 100 and 250 both jumped on Friday on news of a surprise Tory majority in the UK elections.

But Britain’s index is around 70 points lower this morning. The biggest faller is easyJet, down over 7% after warning that French strikes in the airline sector back in April mean full-year profits will be £25 million ($ 38.95 million) lower than forecast. 

Fears that Britain could also leave Europe are hitting the FTSE 100, with the possibility of a referendum as soon as next year.

Accendo Markets analyst Mike van Dulken told clients in an email this morning: “Strong business confidence following a Conservative win is tempered by a budget deficit of around 5% of GDP, which is over the EU’s limit of 3%, and the prospect of a referendum on the UK’s future in Europe. Retail sales also disappointed in May with the early Easter holidays largely blamed for the print missing consensus and deteriorating on last year.

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