As was widely expected, Boris Johnson has just been announced as the new leader of the Conservative party. With markets buying the rumour and selling the fact, Sterling has initially strengthened on the news although it seems unlikely that this positive move for the Pound will be sustained, given the uncertainty of the road ahead for the UK.
Mr Johnson moves into number 10 tomorrow afternoon (23rd July) ahead of announcing his new cabinet by the end of the week. He will then have a little over three months to renegotiate the UK’s exit from the EU. No mean feat in itself which then of course will need to be debated and agreed by parliament when they return from their summer recess on the 3rd September.
This will be made all the more difficult for the new Prime Minister as he takes on the role with a slim and dwindling majority in parliament following a number of resignations from Tory MP’s who have publicly stated they cannot support the possibility of a No-Deal Brexit.
What does this mean for the Pound? With this continued uncertainty Sterling is likely to remain under pressure as we progress through the Summer with market sentiment shifting as the possibilities of deal, no deal or potentially a new General Election are played out.
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