Markets ‘confident’ as Rishi Sunak set to become U.K.’s Prime Minister
FTSE 100 seems to be regaining some momentum on Monday as Rishi Sunak won the race to become the next Prime Minister of the United Kingdom.
Gilt yields are trending down
Earlier today, rival candidate Penny Mordaunt withdrew from the contest clearing way for Sunak to take the office. Boris Johnson had pulled out a day earlier as well.
King Charles will now officially appoint Sunak as the Prime Minister of the United Kingdom in the coming days. Gilt yields were trending down this morning suggesting confidence in the new leader. Danni Hewson – Financial Analyst at AJ Bell said:
Markets are confident that they know the kind of Prime Minister Rishi Sunak will be. Yields have come down, [suggesting] markets feel that once against the U.K. is getting back to [what] they would expect from an established economy.
Sunak will be U.K.’s third Prime Minister in two months and first of color in its history.
Expectations are high
Sunak, of course, has a massive task on hand of restoring both political and economic stability in the United Kingdom as he fills the shoes for Liz Truss who cost at least $500 billion to the UK markets in her 44 days in the office (detailed here).
Expectations are particularly high since he’s formerly served as the Chancellor of the Exchequer and was central in steering the British economy through the pandemic. According to Susannah Streeter – Senior Investment & Markets Analyst at Hargreaves Lansdown:
With his experience as a hedge fund manager and the time he’s spent in California, right in the heart of the big tech industry, he’ll be expected to give a rocket boost to home grown tech talent. This will be no quick fix, though.
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