Rishi Sunak set as new UK Prime Minister
The pound now has prompted a new optimistic outlook to target 1.20 if Sunak was able to sustain his mandate
Vulnerable to the current political and economic state of the country, the new prime minister decision was quite challenging. But optimism spiraled after Rishi knocks off other contenders and takes frontrunner, set to be the next U.K Prime minster. After warning the conservative party earlier that Truss’s agenda would not survive considering high inflation and the current economy rundown.
Historically Boris Johnson won the conservative party as he actually managed to finalize Brexit while Theresa May desperately couldn’t, but then again, he lost their confidence as he couldn’t manage the pandemic well receiving a lot of backlash, with his own cabinet resigning one by one, prompting him to exit himself. On the same note, Liz truss being the shortest serving PM and was unable to manage her duties, as inflation spiraled out of control under her reign with the pound witnessing its lowest levels at 1.03. A shock to markets.
The U.K’s Blue chip FTSE 100 fluctuated trading near levels of 7,030. With inflation around double digits, the pressure on the blue chip will keep on rising considering that the bank of England might speed up the pace of tightening to defeat the high figures that will in turn, cause the FTSE to shed as well as businesses being limited of growth including how the energy crisis is too an added pressure. Meanwhile the pound was able to pick up following the news of Boris Johnson exiting the race and Rishi Sunak to become PM.
The Pound had already been exposed to intense volatility over the past few months, with speculation that it would have fallen below parity, if it wasn’t for the bond buying program. The pound now has prompted a new optimistic outlook to target 1.20 if Sunak was able to sustain his mandate. Which confirms the bullish outlook for the pair, as a start of a new impulsive uptrend is in the books for the GBP, if its manages to exceed the level of 1.1510. Technically the next target will be aiming above the 1.21 handle, considering the level of 1.1510 is the psychological resistance that the pair couldn’t pass above since mid of September, which is the short to medium term outlook.
During the reign of the conservative party, and economic and political instability, including the major effects of the energy crisis, the country’s people have suffered consistently with multiple shocks of inflation, Covid-19, underlining the deep economic issues that came after Brexit. Putting the UK’S policy makers in critical situations in attempt to tackle the biggest issue of all, recession. And forcing central bank interventions to minimize or save the bonds market stability, which if I didn’t mention before has collapsed too, affecting people’s pension funds.