Written by Brenda Nakalema

Boris Johnson Resigns. U.K Stock Market Could Slip By 3% Amidst Turmoil

Boris Johnson Resigns. U.K Stock Market Could Slip By 3% Amidst Turmoil Boris Johnson handed in his resignation as U.K …

Boris Johnson Resigns. U.K Stock Market Could Slip By 3% Amidst Turmoil

Boris Johnson handed in his resignation as U.K prime minister Thursday after over 50 ministers resigned as a show of lost confidence in his leadership.

While standing on the steps of Downing Street, he said, “it is evidently the will of the parliamentary Conservative Party that there ought to be a new leader for that party and therefore a new prime minister. And I’ve agreed… that the search for a new leader should begin now and the timetable will be announced next week.

It’s painful not to be able to see through so many brilliant ideas and projects myself. The herd instinct is powerful. When the herd moves, it moves, and my friends, none is remotely indispensable in politics. And our brilliant Darwinian system will produce another leader, equally committed to taking his country forward through tough times.”

The undercurrent of power transition is yet to reflect in the markets. The pound remains steady at roughly $1.19, a 0.05% increase on the day, and the FTSE 100 stock index increased by 1.2%. The difference is likely an indication that Johnson’s replacement will follow similar policies and that a risk premium has been attached to British politics for a while now, according to an economist at Capital Economics, Kieran Tompkins.

Nonetheless, the impending recession and continuing disputes over Brexit mean that the pound will drop further, and the FTSE 100 will drop another 3% by the year’s end, he said.

One businessman, Jeff Dewing, CEO of facilities management company Cloudfm, said, “The success or failure of any business or institution is entirely based upon its leadership. Most would agree there has been little or no leadership from this government since pre-Covid.”

Only recently, Johnson narrowly survived a vote of no confidence, which meant he couldn’t be challenged for a year, leaving the monarchy as the only legal way to force him to step down. It’s not likely that the Queen would have taken such drastic action, given that it would be viewed by many as an unthinkable interference in politics when her role is meant to be entirely ceremonial.

The last time the monarchy directly interfered in politics was in 1834 when King William IV dismissed Lord Melbourne. He eventually backtracked a year later and re-instated the Whig Party leader as head of the government.