May Admits Defeat
Theresa May announced on Friday that she would be stepping down as Prime Minister on June 7th. During a tearful speech, delivered outside No 10 Downing Street, the battle-weary PM said “I have done my best… It is, and will always remain, a matter of deep regret to me that I have not been able to deliver Brexit”.
May said that she will stay on as PM while the Conservative party holds a leadership context beginning June 7th. They hope to have a new PM in place by the end of July.
In a show of clear emotion of her departure, May said:
“I will shortly leave the job that it has been the honor of my life to hold – the second female Prime Minister but certainly not the last… I do so with no ill-will, but with enormous and enduring gratitude to have had the opportunity to serve the country I love.”
Boris Johnson The Favourite To Takeover
As yet, the predictions for who will take over from May have centered around Boris Johnson. Speaking to reporters following May’s departure, Johnson confirmed that he will run for Conservative Party leader. He thanked May for her “very dignified statement” saying: “Thank you for your stoical service to our country and the Conservative Party… It is now time to follow her urgings: to come together and deliver Brexit.”
Corbyn Criticises May
The reaction from May’s political opponent Jeremy Corbyn was much less gracious. He told reporters May was “right” to quit. He further said “She has now accepted what the country has known for months: she cannot govern, and nor can her divided and disintegrating party,”
No Deal Brexit?
Johnson was a key player in the push for the Brexit referendum in 2016 and has been notoriously anti-EU since his days as a reporter in the mid-90s. Indeed, Johnson famously retired his position as a member of May’s cabinet last year in protest at, what he called, her “surrender” over Brexit. A Boris Johnson led-government could be far more likely to press ahead with a no deal Brexit, just to get Brexit done. This could have serious negative repercussions for GBP and the UK economy.
MEP Elections Display Growing Political Dissatisfaction
In the MEP elections held last week, Nigel Farage’s Brexit party stormed ahead to take more seats than the two main parties. The initial results show that out of 64 MEPs declared so far, Farage’s party has won 28, the Lib Dems 15, Labour 10, Greens 7, the Tories 3 and Plaid Cymru 1.
Speaking with reporters, Farage said “With a big, simple message – which is we’ve been badly let down by two parties who have broken their promises – we have topped the poll in a fairly dramatic style.
“The two-party system now serves nothing but itself. I think they are an obstruction to the modernizing of politics… and we are going to take them on.”
Uncertainty Elevated Again
The results once again highlight the growing dissatisfaction among UK voters, as evidenced recently by equally surprising results in the UK local elections. This dissatisfaction is creating uncertainty among investors as the UK political stalemate continues, though the tide seems to once again be shifting in favor of achieving Brexit.
The sell-off in GBPUSD found support at a test of the 1.2760 structural support and bearish channel low. For now, focus remains on a continuation lower and ant retest of the 1.2802–1.2866 level is likely to find resistance, keeping the bear channel intact as price moves back toward the 1.2484 level.