Spain’s prime minister Pedro Sánchez has called a snap general election in July after his Socialist party suffered a resounding defeat in local and regional elections on Sunday.

Sánchez made the surprise announcement on Monday morning as the conservative People’s party was still celebrating its huge electoral gains across the country. The PP will need the support of the hard-right Vox party to govern in many cities and regions.

The prime minister, in office since 2018, said he would dissolve parliament to prepare for the polls on July 23, leaving the future of the EU’s fourth largest economy and a committed Nato member up for grabs.

The Sunday vote in 12 regions and more than 8,000 municipalities was a crucial test of the national mood and produced grim results for Sánchez, suggesting he would face an uphill struggle to hold off conservatives in a general election that had been due in December.