UK parties move toward a deal

Britain's election deadlock appeared closer to resolution on Monday as David Cameron's Conservatives and their potential ally, the Liberal Democrats, reported progress in talks to form a new government amid fears that prolonged uncertainty would rattle the markets.

Spokesmen for the two parties refused to comment on a Sky News report that they have reached an "outline deal" that will be put to their members of parliament on Monday.

"We have made further progress," said William Hague, chief negotiator for the Conservatives. "We are now going to report back to David Cameron and have meetings with our parliamentary colleagues."