Assessing the fact that Boris Johnson won the Conservative party leadership contest to become the next Prime Minister of the United Kingdom, Fitch ratings said that they were expecting the UK politics to remain volatile and added that the odds of a no-deal Brexit was now higher.
The GBP/USD pair doesn’t seem to be paying any mind to Fitch’s comments and was last seen trading at 1.2435, erasing 0.3% on a daily basis. Below are some key takeaways from the publication, as reported by Reuters.
“UK political volatility is set to intensify in the run-up to extended 31 October Brexit deadline.”
“Election of Boris Johnson as leader of UK Conservative party further increases risk of a no-deal Brexit.”
“Domestic political outcomes, and therefore timing and nature of the UK’s exit from the EU, are still highly uncertain.”
“Boris Johnson may struggle to restore parliamentary party’s cohesion.”
“Brexit-related uncertainty weighing on UK growth, which had proved resilient following 2016 EU referendum, although underperforming G7 peers.”
“UK fiscal easing is highly probable regardless of the final Brexit outcome.”
“Efforts to break parliamentary deadlock could lead to a range of outcomes, including general election and/or a 2nd referendum.”
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