The Rishi bounce? Pound soars to $1.14 after Boris Johnson drops out of Tory leadership race – as analysts say a Sunak-led government is ‘more welcome for stability’
This morning, the value of Sterling climbed as high as $1.1401 against the dollar in early Asia trading, amid expectations could become Prime Minister today.
Commenting on the rise, after a weeks of the pound’s weakness against the dollar, experts said a government led by Mr Sunak seemed ‘more welcome for stability’.
Mr Johnson dramatically pulled out of the contest last night, saying that continuing his bid for a return was ‘simply not the right thing to do’, citing the need to ‘unite’ the party.
The only other candidate in the running is Penny Mordaunt, but the Commons Leader has only secured 26 backers and needs 100 MPs on her side by 2pm to continue in the race.
The value of the pound soared after Boris Johnson’s departure from the Tory leadership race left Rishi Sunak as the favourite to be the next Prime Minister
Mahjabeen Zaman, head of FX research at Australia & New Zealand Banking Group, told the Telegraph: ‘A Sunak-led government seems more welcome for stability.
‘While the risk premium in FX from the original budget has been reduced by the U-Turn, the pound still faces ongoing challenges.’
Mr Johnson is understood to have realised that he could not achieve unity when key Tory figures such as former Home Secretary Suella Braverman and prominent Brexiteer Steve Baker – both of whom are popular on the Tory Right – gave their backing to Mr Sunak.
Last night there was no immediate response from the Sunak camp, with a source reportedly saying the ex-chancellor is ‘not taking anything for granted’ and that he will ‘continue to talk to colleagues’ and ‘discuss how best to unite the party and take the country forward’.
It comes after Mr Sunak appeared to be surging further ahead in the contest yesterday as he also secured the backing of Grant Shapps, who replaced Ms Braverman as Home Secretary following her resignation this week, and Work and Pensions Secretary Chloe Smith.
Armed Forces Minister James Heappey also said Mr Sunak would ‘bring together our divided party and restore stability to our Government’.
Mr Johnson dramatically pulled out of the contest last night, saying that continuing his bid for a return was ‘simply not the right thing to do’, citing the need to ‘unite’ the party. Above: Mr Johnson after arriving back in the UK; Mr Sunak leaving his home today