Andrea Leadsom’s decision to quit the UK’s Conservative party leadership battle is likely to be welcomed by the financial markets, affirms the boss of one of the world’s largest independent financial advisory organizations.
Nigel Green, deVere Group’s founder and CEO, is speaking out after the British energy minister pulled out of the race against Home Secretary Theresa May to lead the ruling Conservatives and become the next Prime Minister.
Mr Green states: “Of course, the race to find David Cameron’s successor as the next British Prime Minister is now going to be resolved much earlier.
“This is likely to be largely welcomed by the financial markets for two key reasons.
“First, Leadsom quitting eradicates one layer of the uncertainty that has been hanging over the UK since the historic vote to leave the EU. The many question marks since the Brexit decision have, unsurprisingly, created volatility in the markets. With Leadsom pulling out there is one less question mark.
“Investors in the UK and globally are craving more certainty and stability in the UK and this should help.
“Whilst the pro-Brexit lobby will argue that the FTSE is up almost 5 per cent since the referendum and at an 11-month high on Monday, this doesn’t reflect the real picture of the UK economy.
“Firms on the UK’s blue chip index receive most of their earnings from outside Britain. The current gains on the FTSE reflect international companies’ earnings being enhanced due to the weakness of the pound.”
He continues: “It can also be expected that Theresa May, a Remain supporter, will not be as aggressive in the Brexit negotiations as Andrea Leadsom would have been.
“May could possibly kick triggering Article 50 way into the long grass, or go for the Norwegian model and allow free movement in exchange for access to the single market.
“This kind of ‘Brexit-Lite’ might well please the markets – which had widely priced in and were largely relying upon a Remain victory before the shock result.”