TheÂ British pound is rallying onÂ Tuesday after it was confirmed that former London Mayor Boris Johnson would become Britainâs new prime minister. InÂ addition toÂ aÂ higher pound, European markets appeared toÂ cheer onÂ theÂ pro-Brexit politician asÂ leading indexes recorded 1% gains. But that did not prevent disappointing data from capping theÂ currencyâs ascent.
Shortly after Prime Minister Theresa May announced that she was stepping down, theÂ Conservative Party ran aÂ leadership aÂ race. InÂ theÂ end, Johnson overwhelmingly defeated his main Remain opponent, Jeremy Hunt, byÂ winning two-thirds ofÂ theÂ votes inÂ aÂ ballot ofÂ approximately 160,000 tory members. Johnson is expected toÂ receive theÂ keys toÂ 10 Downing Street from May onÂ Wednesday.
Johnson delivered aÂ speech after nabbing theÂ nomination, promising toÂ give theÂ country Brexit, unite theÂ people, andÂ resoundingly defeat Labour inÂ May 2022.
He received congratulations from leaders all over theÂ world, including President Donald Trump, who tweeted:
Congratulations toÂ Boris Johnson onÂ becoming theÂ new Prime Minister ofÂ theÂ United Kingdom. He will be great!
One ofÂ theÂ biggest issues forÂ Johnson toÂ grapple with is Brexit. Michel Barnier, theÂ European Unionâs chief Brexit negotiator, said that he is looking forward âtoÂ working constructivelyâ with theÂ new prime minister. But theÂ 28-nation trade bloc has insisted that it will not renegotiate aÂ withdrawal agreement â theÂ initial one was repeatedly rejected inÂ theÂ House ofÂ Commons. Johnson has conceded that if no new pact is agreed upon, then Britain will leave theÂ EU onÂ Halloween âcome what may.â
OnÂ theÂ data front, theÂ Confederation forÂ British Industry (CBI)’s Business Optimism Indicator forÂ theÂ UK slipped 19 points toÂ -32 inÂ theÂ third quarter ofÂ 2019, theÂ lowest reading since Q3 2016. TheÂ measurement ofÂ business confidence has not been inÂ positive territory since theÂ first quarter ofÂ last year.
Also, theÂ CBI industrial trends orders fell 19 points toÂ -34 inÂ July, which represents theÂ lowest level since April 2010.
Britain enjoyed strong retail sales inÂ June, advancing 1% from theÂ previous month. TheÂ numbers surprised markets because analysts had anticipated aÂ decline ofÂ 0.3%.
European financial markets soared onÂ Tuesday. TheÂ FTSE advanced 0.87% andÂ theÂ FTSE MIB rose 0.96%.
TheÂ USD/GBP currency pair rose 0.32% toÂ 0.8041, from anÂ opening ofÂ 0.8015, atÂ 13:55 onÂ Tuesday. TheÂ GBP/EUR rose 0.18% toÂ 1.1148, from anÂ opening ofÂ 1.1130.
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