Various media outlets are reporting this morning that Boris Johnson is set to announce his resignation imminently. The BBC are reporting that a statement will be made later this morning. It appears that he will stay in the job until later this summer when a replacement has been appointed by the Party.

We saw the first signs of market reaction today, with GBP jumping half a cent versus USD to 1.1985 on the rumours. The FTSE 100 sunk lower, but is trying hard to battle back.

A resignation should be positive for the UK economy, while we remain politically neutral. A new face, a new direction and importantly a new fiscal path from the Government (and new Chancellor) could all help UK assets gain in the mid term.

Much of this will depend on the timeline of departure from PM Johnson, and who succeeds him in power. In most cases, we think this could lead a rally in GBP, which could hurt the FTSE 100. Some of this equity move will be offset from better risk sentiment though, so overall we feel the market implications are GBP positive and FTSE 100 neutral.

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