(Kitco News) - Turmoil in the U.K. government this morning after Prime Minister Boris Johnson announced his intention to resign. Johnson has been under heavy pressure over the last month or so after his own (Conservative) party called a no-confidence vote and prominent ministers including Chancellor Rishi Sunak quit. More than 50 government ministers and aides have quit recently.
Johnson is set to resign as Conservative leader later today but hopes to stay on until autumn on an interim basis while a successor is appointed. Many MP's are suggesting he should leave straight away. Business Secretary Kwasi Kwarteng has suggested he does not want Boris Johnson to stay until the autumn saying "We now need a new leader as soon as practicable. Someone who can rebuild trust, heal the country, and set out a new, sensible and consistent economic approach to help families."
Former Chancellor Rishi Sunak has been given an 18.2% implied probability of winning from British bookmakers. Penelope Mary Mordaunt is currently 14.1%. She is serving as Minister of State for Trade Policy since 2021. She has been a Member of Parliament for Portsmouth North since 2010. Secretary of State for Defence Ben Wallace has been given the same probability. Liz Truss Secretary of State for Foreign, Commonwealth, and Development Affairs is at 12.5%.
In terms of a market reaction, GBP/USD shot up following the news and pro-business Rishi Sunak could be good for the GBP. The GBP/USD pair is currently trading 0.83% higher just above 1.20. The FTSE 100 has also moved higher but there is a broader more positive theme in equities this morning and gold is also 0.30% in the black.
