UK markets brace for prolonged political uncertainty
British markets braced for more political uncertainty on Wednesday, with investors keen to see if the new finance minister loosens the purse strings and wondering whether Prime Minister Boris Johnson will survive an exodus of support.
The pound dropped to more than two-year lows against the dollar but British stocks climbed.
Some analysts attributed the gains to hopes for more public spending, but the rise in share prices was in line with gains across broader markets and followed big falls on Tuesday, when Johnson’s grip on power was rocked by Rishi Sunak quitting as finance minister and Sajid Javid resigning as health secretary.
Several others have left their junior ministerial or envoy roles.
Analysts said markets would struggle until they had a better understanding of the priorities of Nadhim Zahawi, the new finance minister, and whether Johnson could weather the storm.
