Markets Steady as Sunak Becomes New Prime Minister

On Monday, UK stock markets climbed a little but remained steady as news of an uncontested Conservative Party Leadership contest with Rishi Sunak the sole entrant and now our new Prime Minister after both Boris Johnson confirming he would not run yesterday and Penny Mourdant’s withdrawal from the race today.

The pound remained largely unchanged against the dollar at $1.14 and UK 30 Year Gilt yields (the cost/interest rate on UK government borrowing) fell back to 3.8% when it had hit as high as 5.17% after the Mini Budget debaclein late September.

Comment

We anticipate a period of relative stability, we hope in UK politics (ignoring global pressures on markets, energy, inflation and Russia/Ukraine).  We also hope Rishi does not stir things up too much within his new cabinet and he keeps Jeremy Hunt as Chancellor, who backed Sunak for Prime Minister after his own withdrawal from the last Conservative leader and Prime Minister race that Liz Truss eventually won.

For now, it is onwards and upwards as we prepare for the Autumn Budget, brought forwards 3 weeks to 31^st October and then to the Bank of England’s Monetary Policy Committee decision on interest rates due on 3^rd November.