The pound is now down 0.5% against the euro, with one pound currently worth €1.15 after Morgan McSweeney resigned yesterday. The pound also dropped 0.1% against the dollar. Meanwhile, 10-year gilts climbed to above 4.54% – up three basis points. Jane Foley, a foreign exchange strategist at Rabobank, told Bloomberg:
“The market will be very wary of UK political jitters particularly if it starts to look likely that the next PM may come from the left wing of the Labour party.”
The markets are already pricing in a new PM. The line that a change of leader would trigger a bad reaction won’t stick…
Paula Barker, Liverpool Wavertree MP backing Andy Burnham, told Times Radio there wouldn’t be trouble from the markets under Burnham:
“The markets will have to fall in line.”