Investing.com – The assets of the United Kingdom have been little comforted Tuesday by the confirmation of Boris Johnson as the new leader of the Conservative Party, a status that is not confirmed yet, as the next Prime minister of the United Kingdom.
The result, which had already been widely anticipated, has not changed the point of view of the participants as to the likely evolution of the events of the next few weeks, which will certainly be dominated by the departure of the Uk from the European Union. However, the refusal of Johnson to abandon a departure from the EU without any transitional arrangements had contributed largely to this that the book reaches its lowest point in two years, while his rival Jeremy Hunt travelled to the country to solicit the support of the members of the party.
The party has confirmed on Tuesday that Johnson had beaten Hunt by a margin of 2:1 in a vote in which nearly 150 000 members have voted. The margin was a little wider than what many experts had expected.
At 16h15, the book was 1,2452 USD, down 0.2% compared to before the announcement, after having recorded a peak intraday of 1,2482 USD. It was up 0.2% against the euro.
The FTSE 100 quickly reversed the modest increase following the announcement, registering an increase of 0.6%, to where it was before the announcement, while the yield on the government 10-year Gilt was unchanged to 0.71%.
In a brief speech to the members of the party, Johnson reiterated his three-fold objective of achieving the Brexit before the 31st of October, uniting a party divided in two by the decision to leave the EU and leading the Tories to victory in the next general elections.
Under the british act, it must be done by 2022, but the Times of London announced that Johnson was already preparing for an election early next year, in the hope to exploit divisions in the labour party of the left, which heads the opposition.
In his speech, he has not indicated whether he would insist that his cabinet ministers have to share his desire to take the risk of a “Brexit without agreement”. A number of senior officials, including the head of finance, Philip Hammond, and the secretary for Justice, David Gauke, has already resigned, declaring they could not support Brexit without agreement. Anne Milton, minister for Education, said: “It is important for me to be free to do what I think to be fair for the country and for my constituents”.
These resignations are exposing Johnson to a risk of a vote of no confidence if he insists to try to achieve the Brexit without an agreement.