Today we finally heard the news the UK had been expecting for what feels like months. Theresa May has finally announced her resignation from office and the UK begins the search for a new Prime Minister. Brexit is of course the reason for the move, and after Mrs May pulled the fourth attempt at passing her withdrawal agreement the writing was on the wall.
Theresa May’s tenure as PM will be seen fundamentally as a failure, whether that is fair or not, fundamentally she failed to deliver on the will of the people, she failed to deliver Brexit. Now, any likeminded individual will know this doesn’t lay solely at the door of Number 10, but should certain decisions not been made, and other made quicker things could have been different.
For me the fundamental mistake didn’t have anything to do with Brexit, but it was her call of a general election against the “unelectable leader of the opposition, Jeremy Corbyn”. Her failure to win a majority in the 2017 general election led to being at the mercy of the DUP, at a time when Norther Ireland and the Irish backstop was likely to be the biggest stumbling block during Brexit negotiations.
A focus on delivering Brexit before cementing her position as PM, with hindsight would have been far better the country and for her long-term position.
The reaction of the Pound has been an interesting one with move. After rallying on rumors of the announcement when we it came the reaction saw the gains paired. The Sterling reaction was always going to be kneejerk, with the realization that very little actually changes. A new Tory PM has the same issues and hurdles to overcome. The likelihood is that a new more hardline Brexiteer will be the new PM, the likes of Boris Johnson and Dominic Raab are the frontrunners.
So with GBPUSD we are back to a situation of uncertainty causing the pound to fall, but also the fact that a “No Deal” Brexit is closer to being a reality. Either way it is certain that the Brexit saga is far from over, and there is a whole lot more uncertainty to come. What we do know is that come the end of the summer there will be a new PM in 10 Downing Street.
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