'Significant progress' in Theresa May's talks with the DUP

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May's failure to get a majority has undercut her tough Brexit strategy, which had raised fears that Britain was heading for a so-called "hard Brexit", which could potentially see tariffs slapped on British exports to the bloc.

Labour, the Liberal Democrats and the SNP pounced on the delay as a sign May's promise that she could form a minority government was in chaos, as the prime minister chaired her first meeting of her reshuffled Cabinet at 10 Downing and met to placate a group of right-wing MPs known as the 1922 committee who are livid with her performance.

After attending the Prime Minister's political cabinet on Monday, she told BBC News: "I'm suggesting that the Conservative Party works with those both within the House of Commons and with people without to ensure that as we leave the European Union we have a Brexit that works for the economy and puts that first".

The prime minister's most prominent potential rival, Foreign Secretary Boris Johnson, sought to quash any suggestion that she would be ousted imminently.

Recriminations over May's disastrous campaign threaten to consume the Conservative Party.

As London and Dublin are seeking to act as honest brokers in trying to break the impasse over the Northern Ireland executive, May's intervention with the DUP has thrown the whole process into political turmoil. "As we do, we will continue to work with our friends and allies, in the Democratic Unionist Party in particular".

Labour leader Jeremy Corbyn countered with a bit of previously unseen swagger, wearing a huge red rose - his party's symbol - in his lapel as he sparred with May and taunted her about the uncertainty surrounding the upcoming vote on her legislative program, known as the Queen's Speech.

To stay in government, May must strike a deal with the Democratic Unionist Party (DUP), a small eurosceptic Northern Irish party with 10 parliamentary seats.

Over the weekend, May's top two aides stepped aside.

"The Northern Ireland Assembly will make those decisions; the elected government will make those decisions - they're two diverse and different opinions".

May also restored former Justice Secretary Michael Gove to the Cabinet in another move created to show she was willing to listen to critics. Gove, who was dismissed when May became prime minister past year, will now serve as environment secretary.

Scottish Conservative leader Ruth Davidson said the government should put economic growth at the heart of its Brexit strategy, while some senior ministers have pushed for less focus on immigration and more on jobs.

"We know those talks [with the DUP] are going well and also we know that, at this very important time, we want to produce a substantial Queen's Speech", he said.

"I can't negotiate with myself", he told European newspapers including the Financial Times.

Mr Davis also indicated "we will start down this process" by focusing on the divorce proceedings from the European Union before moving on to trade.

The EU has said that sufficient progress must be made on these issues before trade deals can be discussed, though Britain had argued the talks should take place simultaneously.

Moody's Investors Service said the inconclusive election outcome would complicate and "probably delay" negotiations with the EU.

The negotiations were due to start on 19 June but Brexit Secretary David Davis has indicated this timetable could slip by a few days amid events in Westminster.

Scotland voted by 62 percent to remain in the European Union in last year's historic referendum but it wasn't enough to change the overall United Kingdom result, with 52 percent in favor of leaving. "The current uncertainty can not continue", he said on Twitter. The Institute of Directors survey said company directors see no clear way to resolve the political situation quickly. "The needs of business and discussion of the economy were largely absent from the campaign, but this crash in confidence shows how urgently that must change in the new government".

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