The Etixx Quick-Step rider was among the survivors of a 15-rider breakaway on the 188km stage and was joined by Dimension Data man Steve Cummings, who had broken away on the climb of The Struggle, and was an aggressive presence throughout.
“I knew once the break had gone it would be very difficult to catch us or if they did catch us they would have wasted a lot of energy as well,” said the 27-year-old Vermote afterwards.
“Once I saw Cummings coming back I knew I had to stay in his wheel because once he gets a little gap he’s gone. We had good co-operation between us but I’m really glad I could take the stage win.”
The first half of the stage was run off in sunny conditions, with the strong 15-rider lead group containing overnight leader and Stage One winner Andre Greipel, Team Sky’s Nicolas Roche and Vermote.
Once through Keswick and over the second King of the Mountains climb of Chestnut Hill the rain and mist set in, with the much anticipated climb of The Struggle out of Ambleside proving decisive.
Dimension Data’s Mark Cavendish led the peloton on to the brutal climb, just over a minute and a half down on the fracturing front group as Vermote and Roche went clear from the break with Xandro Meurisse, Bert-Jan Lindemann and Trek Segafredo’s Jacopo Mosca. BMC’s Rohan Dennis and Cummings both managed to make it across to the leaders, and Cummings put in several attacks on the rolling Crook road from Windermere towards Kendal, with Vermote the only rider able to follow him.
The pair built a 40-second gap as they approached 5km to go, the majority of that work done by Cummings.
With Cummings leading up the final climb at Beast Banks, Vermote surged past on the outside as the gradient eased going into the final 200m, crossing the line with a two-second advantage, good enough for a six second lead going into today’s third stage in Cheshire.
The win was Vermote’s first since his victory in Brighton during the 2014 Tour of Britain, when he won alone at the end of another arduous stage.
“I asked the team to come here, I knew it wasn’t originally in the programme but I knew there would be some opportunities,” said Vermote. “It’s a really tough race though, small roads and up and down all day but I’m just really happy I took my chance.”
Behind Vermote on the general classification is Cummings, with Dan Martin third at 1m04s.
Meanwhile, Chris Froome did not make up ground on leader Nairo Quintana as attention focused on the sprinters in stage 16 of the Vuelta a Espana.
The Briton finished in the peloton, alongside Quintana, after Luxemburg’s Jean-Pierre Drucker won a dramatic bunch sprint at the end of the 156.4km stage to Peniscola.
The result leaves Team Sky’s Froome three minutes and 37 seconds adrift of the Movistar rider ahead of today’s rest day.
Froome’s best chance of cutting into what is a significant gap is expected to come in the time trial on Friday.