Topline
The British pound jumped by nearly half a percent against the U.S. dollar and stocks rallied on Thursday morning following media reports of Prime Minister Boris Johnson’s imminent resignation which will end a political crisis that began earlier this week after several senior ministers resigned from Johnson’s cabinet.
Britain’s Prime Minister Boris Johnson is expected to resign later on Thursday.
Key Facts
Following news of the resignation, the pound rose 0.5% against the dollar and nearly reached $1.20 before settling at $1.197.
Although the U.K. stock markets had not previously reacted to the political drama at Downing street, the London Stock Exchange’s marquee FTSE 100 index was up more than 1% in morning trading.
The more mid-cap focussed FTSE 250 index also rose more than 0.8%.
Crucial Quote
Walid Koudmani, chief market analyst at brokerage firm XTB told The Telegraph: “The resignation of Boris Johnson as UK PM will breathe a sigh of relief for UK investors as it curtails the uncertainty of a government in name only…the GBP remains severely weak due to the dire state of the UK economy which is underperforming its peers, likely to enter into a recession.”
Suprising Fact
According to the British betting website Ladbrokes, the country’s international trade minister Penny Mordaunt is the bookmakers’ favorite to replace Johnson as the leader of the conservative party with odds of 5/1. Mordaunt is trailed closely by the former Chancellor of the Exchequer Rishi Sunak.
This is a developing story.
Source: https://www.forbes.com/sites/siladityaray/2022/07/07/pound-and-uk-stocks-rise-after-reports-of-prime-minister-boris-johnsons-resignation/