Busi­ness dis­mayed as Brexit chaos erupts

Pound tum­bles over shock blows to May’s lead­er­ship

Yorkshire Post - Business - - FRONT PAGE - Ros Snow­don CITY ED­I­TOR @RosSnow­donYPN

Busi­nesses have re­acted with dis­may to the news of two cabi­net min­is­ters re­sign­ing over Brexit, just af­ter the pound showed signs of re­cov­ery on hopes that the Che­quers deal might safe­guard busi­ness in­ter­ests.

Par­cel ex­port firm ParcelHero said the Brexit chaos is “more nerve-wrack­ing than the World Cup”.

The firm said: “We’d rather watch Eng­land take penal­ties in the World Cup fi­nal than see Bri­tain go into the fi­nal round of Brexit ne­go­ti­a­tions so dis­uni­fied.

“Sup­port­ers of a soft Brexit cheered on Theresa May’s vic­tory over hard Brex­i­teers; only to see an own goal by Brexit Sec­re­tary David Davis fol­lowed by an op­por­tunist move by For­eign Sec­re­tary Boris John­son, po­ten­tially re­vers­ing an ex­cel­lent re­sult.”

Mr Davis’s res­ig­na­tion was largely ig­nored by mar­kets.

Af­ter an ini­tial fall on the news, the pound re­cov­ered as mar­kets took on board the news that he is be­ing re­placed by Brex­iter Do­minic Raab.

Ster­ling had been rid­ing high ear­lier in the ses­sion af­ter Mr Davis re­signed, with traders in­ter­pret­ing his depar­ture as in­creas­ing the chances of a soft Brexit.

How­ever, mar­kets turned less san­guine when Mr John­son also an­nounced his res­ig­na­tion, which sent the pound tum­bling as it plunges Mrs May into a fresh lead­er­ship cri­sis.

He­lal Miah, an­a­lyst at The Share Cen­tre, said: “The news of David Davis’ res­ig­na­tion as Brexit Sec­re­tary led to ster­ling strength­en­ing as it seemed that things would tilt to­wards a softer Brexit.

“How­ever, as a re­sult of Boris John­son this af­ter­noon quit­ting his role as For­eign Sec­re­tary in re­ac­tion to the on­go­ing ne­go­ti­a­tions, the Prime Min­is­ter’s po­si­tion has be­come all the more weak, which has sent ster­ling to re­verse the gains of this morn­ing. The events of the last 24 hours have greatly in­creased the fears for busi­nesses and in­vestors which jus­ti­fies ster­ling’s fall.”

Con­nor Camp­bell, fi­nan­cial an­a­lyst at SpreadEx, said: “With that be­ing two Cabi­net res­ig­na­tions in less than 24 hours, the pound be­gan to fret about the chances of a for­mal chal­lenge to Theresa May’s lead­er­ship from in­side the Tory party, and the sub­se­quent po­ten­tial for an­other gen­eral elec­tion.”

David Mad­den, mar­ket an­a­lyst at CMC Mar­kets UK, said: “The depar­ture of Mr John­son from the Cabi­net is a ma­jor blow to Theresa May’s lead­er­ship, and it could call her fu­ture into ques­tion.”

He said any signs of a lead­er­ship con­test could weigh on the pound.

THE pound tum­bled on Mon­day amid po­lit­i­cal jit­ters as the re­sig-na­tions of For­eign Sec­re­tary Boris John­son and Brexit Se­cre-tary David Davis raised ques-tions over Theresa May's fu­ture as Prime Min­is­ter. Ster­ling was up as much as 0.5 per cent against the US dol­lar in morn­ing trad­ing, with Mr Davis's orig­i­nal depar­ture hav­ing been in­ter­preted as in­creas­ing the chances of a so-called "soft Brexit". But the for­eign sec­re­tary's res-ig­na­tion in the af­ter­noon sent the pound down nearly 0.4 per cent to trade at 1.324. Against the euro, ster­ling fell 0.3 per cent to 1.126. The cur­rency's losses pro up London's blue chip in­dex which ended the ses­sion up 0.9 per cent or 70.29 points at 7,687.99 points. David Mad­den, a mar­ket an­a­lyst at CMC Mar­kets UK, said: *The FTSE 100 has been helped by Boris John­son's res-ig­na­tion as for­eign sec­re­tary, as the drop in the pound lifted the Bri­tish eq­uity bench­mark 'The depar­ture of Mr John­son from the Cabi­net is a ma­jor blow to Theresa May's lead­er­ship, and it could call her fu­ture into ques­tion.' The res­ig­na­tions of the two Cabi­net "big beasts" come just days af­ter Mrs May se­cured se­nior min­is­ters' agree­ment at Che­quers for a Brexit plan about which both men had ex­pressed reser­va­tions. Mr Mad­den said any signs of a lead­er­ship con­test among the To­ries could fur­ther weigh on the pound. Across Europe, the French Cac 40 and Ger­man Dax ended the day up 0.4 per cent and nearly 0.4 per cent re­spec­tively. Brent crude prices jumped 1.1 per cent to 77.94 US dol­lars per bar­rel as in­vestors re­mained con­cerned over US plans to rein­tro­duce sanc­tions on Iran, which will hit global oil sup­plies. In UK stocks, JustEat was among the best per­form­ers, ris­ing 19.6p to 840p af­ter it was up­graded by RBS to "out­per-form" with a price tar­get of 950p. Sto­bart shares jumped Tap to 2361np as its chair­man fain Fer-gu­son nar­rowly sur­vived an at­tempt to oust him from the com­pany, fol­low­ing a vote at its an­nual gen­eral meet­ing. But the board also blocked the reap­point­ment of its former chief ex­ec­u­tive An­drew Tin­kler, which had been voted through by share­hold­ers. The board said it was not in the best in­ter­est of the com­pany for Mr Tin­kler - who was sacked for urg­ing Mr Ferguson's res­igna-tion - to be­come a di­rec­tor. Mother­care shares fell 1.1p to 27'np af­ter the re­tailer con-firmed it would close an­other raft of stores, mean­ing 60 of its out­lets will be shut by June next year, putting 900 jobs at risk. The re­tailer said it was putting its Chil­dren World divi­sion into ad­min­is­tra­tion, but that 13 of these 22 stores would be saved. The changes come af­ter Moth-er­care cleared a re­struc­tur­ing plan known as a Com­pany Vol-un­tary Agree­ment (CVA), an in­sol­vency pro­ce­dure that re­quired the ap­proval of the re­tailer's land­lords. The group has also un­der­taken a sig­nif­i­cant fundrais­ing ini­tia-tive to raise £32.5m from its ex­ist­ing share­hold­ers. The big­gest ris­ers on the ME 100 were Antofa­gasta up 32p at 976p, Mel­rose In­dus­tries clos­ing the day 5.8p higher at 213.9p, BHP Bil­li­ton up 44p at 1,708.2p, Evraz up 12.8p clos­ing the day at 522.8p. The big­gest fall­ers on the FTSE 100 were Sev­ern Trent clos­ing the day 65p lower at 2,003p, United Util­i­ties Group down 17p stand-ing at 766.4p, Na­tional Grid down 8.7p clos­ing the day at 867.8p and Royal Mail down 4.3p dos­ing the day at 486.7p.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.