The Conservative Party leadership race followed the expected route yesterday as Boris Johnson took a resounding lead suggesting he has already secured himself a spot as one of the final two. Boris won 114 votes from MP’s, leaving only 200 votes remaining for the other candidates, assuming no one leaves Boris he will make the Conservative membership vote ballot.

Currency Pair% Change (Month)Difference on £200,000
GBPEUR2.95%€6,620
GBPUSD2.84%$7,140
GBPNZD3.60%NZD $11,840

Jeremy Hunt came second with 43 which was a few more votes than Michael Gove who still appears to be firmly in the race. Dominic Raab, Sajid Javid and Matt Hancock all found themselves in the twenties with Stewart 2 above the required 17 on 19. There is an expectation that in the next few days some of the candidates may fall out and pledge there support to another, however it’s not always the case that all the MP’s will carry over in a block.

On Sunday night there will be a television debate however at the moment Boris Johnson has not agreed to take part, with Jeremy Hunt suggesting he will only do so if all candidates appear. Boris’s management team appear to be offering minimal exposure to their candidate as they know he is not short of a few gaff’s, it appears the strategy could be the less opportunity to speak the better.

The GBP/EUR interbank rate has remained at a steady level for the last few days as markets may have priced in a Boris win. The loss of 5 cents on the GBP/EUR interbank rate in the last month has come from the fear that no deal is a real option with Boris in charge of the country. Until there is a clear deviation from the cliff edge on the 31st October its unlikely sterling will find much support.

Mark Carney Speech today

Mark Carney speech today

The Governor of the Bank of England Mark Carney will be speaking in the early afternoon today. Carney is often fairly dovish with regards to the UK’s prospect and no doubt will once again provide a warning for the dangers of a no deal scenario. One thing markets may be interested to hear is whether Carney thinks an interest rate hikeis likely in the near future.

Chief Economist for the Bank of England Andy Haldane earlier this month suggested that the UK economy is moving towards a potential rate hike. Haldane believes this would “nip inflation growth in the bud” as there is expected to be growth in the UK for 2019 whilst nothing overly expansive is expected.

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