The two front runners for the Tory leadership now have less than two weeks before one of them becomes the next Prime Minister. 160,000 Conservative members are now in receipt of their ballots and will decide between Boris Johnson and Jeremy Hunt.

Currency Pair% Change (Month)Difference on £200,000
GBPEUR1.0%€2,180
GBPUSD2.1%$5,300
GBPAUD1.1%AUD $4,050

Boris Johnson remains the clear favourite, having secured more than 100 votes from his colleagues in each of the previous rounds. On paper, Jeremy Hunt has little chance of securing the Tory leadership, but Conservative party history has shown that even a clear favourite is never a sure bet.

Last night saw the first of two debates. Jeremy Hunt accused Boris Johnson of “peddling optimism” and highlighted that the only thing important to Boris was being in Number 10. Johnson retaliated by questioning Jeremy Hunt on when the UK would leave the EU saying, “How about Christmas? Any good?” Unsurprisingly, both camps claimed victory but on the whole, I don’t think this will make much change to people’s voting. The second of the two debates will take place on Friday.

A recent ComRes poll has found that Boris Johnson would deliver a 40 seat majority if he was Prime Minister and a general election was held. However, under a Jeremy Hunt leadership, Labour would be the largest party, albeit 63 seats shy of a majority. The Brexit party would gain 23 seats with Jeremy Hunt as PM but would be wiped out under Boris’ premiership. Strangely though, a larger portion of voters believe Jeremy Hunt would make a better Prime Minister than Boris Johnson. People believe Mr Hunt will be better with the economy, looking after public services, and representing the UK on the world stage. Unfortunately for Hunt, people do not have confidence in him beating Jeremy Corbyn in an election.

UK economy wobbling as recession fears set in

UK economy wobbling as recession fears set in

Political and Brexit uncertainty now look to be taking a grip on the UK economy as the Bank of England predicts economic growth to have flatlined in quarter two. Quarter one growth was largely influenced by stockpiling in advance of the Brexit deadline on 31 March and a natural rebalancing seems to have caused a stumble with some economists predicting a contraction. The UK economy has not seen negative growth since 2012 and a contraction in Q2 followed by a contraction in Q3 would put the UK in a technical recession. A recent report by the CBI (Confederation of British Industry) highlighted the lack of willingness of businesses to commit to big capital projects and forecasted a 1.3% drop in investment on the back of an orderly departure from the European Union.

For more information on how pending political and economic events could potentially affect your transfer, please do not hesitate to call your account manager at FCD.

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