British Prime Minister Theresa May has called an early election on June 8, saying it was the only way to guarantee political stability for years ahead as the UK negotiates its way out of the European Union.

The pound strengthened by almost half a cent against the US dollar as May spoke, reflecting investor relief that earlier rumours of a shock resignation did not transpire.

"I have just chaired a meeting of the cabinet where we agreed that the government should call a General Election to be held on the 8th of June," May said in a surprise statement outside her Downing Street office today.

LISTEN ABOVE: British Prime Minister Theresa May announces call for early election

"It was with reluctance that I decided the country needs this election, but it is with strong conviction that I say it is necessary to secure the strong and stable leadership the country needs to see us through Brexit and beyond."

Mrs May told the country she'd originally planned to battle on until the next scheduled election in 2020.

"But now I have concluded that the only way to guarantee certainty and stability for the years ahead is to hold this election and seek your support for the decisions I must take."

Because it is now less than two years since the last election, she will need a two-thirds majority in Parliament to go ahead with the vote.

She told opposition parties she has had enough of them criticising her Brexit plan, and threatening to block it.

"This is your moment to show you mean it.

To show you are not opposing the Government for the sake of it - to show you do not treat politics as a game."