Weak pound will fall further if Boris is PM
The already weak pound will fall further if Boris Johnson is the new British prime minister, according to Nigel Green, chief executive officer (CEO) of deVere Group.
The former London mayor was the odds-on favourite to win the Conservative party leadership contest, having secured the support of more than 40 Conservative members of parliament (MPs).
Green said the pound would be delivered another bloody nose should Johnson win the race to be Tory leader and UK Prime Minister.
“Further downward pressure will hit sterling in this scenario due to the increased likelihood that the United Kingdom (UK) would be taken into a no-deal Brexit by Mr Johnson,” Green said.
“Frontrunner Boris will be further emboldened in his no-deal Brexit approach should Nigel Farage’s Brexit party win its first parliamentary seat in the Peterborough by-election on Thursday evening.”
Johnson had previously said at a conference in Interlaken, Switzerland, they would leave the European Union (EU) on 31 October, “deal or no deal”.
He had intimated he could try to renegotiate a better deal with the EU before pushing ahead with a no-deal Brexit if necessary.
Green said during the past two years the pound had been battered when it came to its price against the other currencies.
“Brexit aside, a Johnson victory would almost certainly increase sterling volatility,” Green said.
“He is known for his erratic style and has a long history of gaffes and controversies – including his infamous ‘f**k business’ comment.”
“If he takes the UK’s top job, his unscripted comments may result in sharp moves in the pound.”
Financial services contribute 6.5 per cent towards British gross domestic product (GDP) and was part of an overall service sector that formed 80 per cent of the country’s economic output.
“A weak pound has become the ‘new normal’ over the last three years since the referendum,” Green said
“But should Boris Johnson walk through that famous black door at Downing Street as PM, the pound can be expected to fall further still.”
Recommended for you
Government has introduced a bill to Parliament to legislate the first stream of the QAR reforms.
ASIC now has a 1:1 ratio when it comes to court success in the enforcement of crypto activities and more action is expected as Treasury seeks to introduce a regulatory framework.
A leading governance body has hit out at “specialist interest groups proposing ad hoc law reform” when it comes to reforms of financial services legislation and believes an independent body is needed.
The release of ALRC’s final report into financial services legislation has highlighted financial advice as a “significant” focus as it seeks to reduce costs and help advisers understand their obligations, alongside the Quality of Advice Review.
