Votes have been counted in 649 of the 650 total constituencies, and Prime Minister Theresa May's Conservative Party won 318 seats.
May's chief opponent, Labour Party leader Jeremy Corbyn, called for May to resign as Prime Minister as election results came in.
The Labour Party's election results plunged the United Kingdom into uncertainty in the early hours of Friday morning as the overall turnout to the election increased to 68.7 per cent, up two per cent from the 2015 general election. The Conservatives still have the most seats but Jeremy Corbyn's Labour Party was the night's big victor, gaining more than 30 seats in Parliament, while the pro-Brexit United Kingdom Independence Party saw its share of the vote collapse.
If the incumbent government is unable to form a coalition big enough to rule, they may either resign and the largest opposition party may be invited to form a government, or they may try to continue to govern as a minority government.
Mr Osborne said the figures would put Mrs May's future as Conservative leader in doubt, saying on ITV: "Clearly if she's got a worse result than two years ago and is nearly unable to form a government then she, I doubt, will survive in the long term as Conservative party leader".
Steven Fielding, a professor of politics at the University of Nottingham, said Britain had seen an election "in which the personal authority of a party leader has disappeared in an unprecedented way".
New elections will be called. The Conservatives, already ill at ease after a gaffe-prone campaign, will ask how she could squander the commanding lead that she enjoyed at the start of the campaign.
German Chancellor Angela Merkel and French President Emmanuel Macron will also wonder who they will end up negotiating with when Brexit talks finally get under way. The pound immediately sank to a seven-week low late Thursday.
Stunning blow for Theresa May as hung parliament is confirmed
Now it has emerged an interview Mrs May gave last month could have been the catalyst for her "disastrous" campaign. She called this election three years early thinking that she could strengthen her mandate before Brexit talks.
Corbyn said: "The prime minister called the election because she wanted a mandate, but she has lost seats, lost votes and lost confidence and that is enough for her to go". The Labour Party was projected to win 266, up from 229.
Labour were predicted to suffer a landslide of losses, but with nearly 100 results still awaited, Labour had made so far 28 gains and the Conservatives had lost 11 seats.
One of those parties, however, would be the Scottish National Party, which was predicted to lose 20 of its 54 seats. Their former leader, Nick Clegg, who was deputy prime minister from 2010 to 2015, lost his seat.
The Conservatives can more realistically hope for the backing of one or both of the unionist parties in Northern Ireland, the DUP and UUP, who are supportive of May's Brexit position.
His LSE colleague Paul Kelly said the result would weaken May's hand in Brussels, where she is due to attend a summit on June 22 and 23. "What we want to see is a workable plan to leave the European Union".
May, a 60-year-old vicar's daughter, is now facing questions over her judgement in calling the election three years early and risking her party's slim but stable working majority of 17. He rode out the criticism, holding open-air rallies at which thousands - including many young people who had not voted before - cheered his message of ending austerity and abolishing college tuition fees. She reversed a policy on care for the elderly - dubbed the "dementia tax" by Labour - when it proved unpopular and refused to appear in TV debates with Mr Corbyn.
European Union budget commissioner Guenther Oettinger said the European Union is prepared to stick to the timetable that calls for negotiations to start in mid-June, but said it would take a few hours at least to see how the results of the election play out in forming a government.
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