Boris Johnson – The Early Days Will be Defining

As Johnson enters office, Brexit and rising tension in the Middle East will be early tests for the new British PM.
Bob Mason

On Tuesday, Boris Johnson was formally announced as the winner of the UK leadership race. There were no surprises in the outcome that propelled the former Mayor of London into Number 10 Downing Street.

Few will have forgotten Johnson’s Leave campaign back in 2016 that ultimately led to Britain voting to go it alone.

Having successfully navigated his way back into the higher echelons of global politics, there are a number of minefields left to navigate through.

The Geopolitical Landscape

It goes without saying that Brexit will continue to be the new British Prime Minister’s main area of focus. With the House of Commons summer recess starting tomorrow and extending to 3rd September, Johnson will have less than 50-days to get a Brexit deal voted in by the UK Parliament.

Perhaps of greater significance will be the time he has remaining to bring together a divided Conservative Party.

Since Johnson’s victory, resignations have been announced and more are likely. Philip Hammond, the Chancellor is due to submit his resignation, which would be the highest-profile resignation.

With the Tories divided on Brexit and having lost the support of voters, Johnson’s days as British PM could be numbered. After all, it is not the British electorate that has voted Johnson in, but Conservative Party members.

Animosity towards Brexit suggests that Johnson and the Tories wouldn’t stand a chance in another General Election. For now, the UK Parliament’s summer recess will at lease avert a vote of no confidence.

Iran and the U.S

Since the diplomatic scandal that strained Britain’s special relationship with the U.S, tensions in the Middle East have been on the rise.

Iran has been far more active and reactive and continues to push Trump’s buttons. Boris Johnson is expected to renew that special relationship with the U.S. Failure to do so would become a very early first black mark for the PM-elect.

The British Prime Minister’s handling of the Iran situation and the delicate balance with the U.S will be key in the early days.

British voters and members of an already divided Tory Party will certainly not be wanting the UK to once more become an aggressor alongside the U.S.

Brexit and the UK economy

The UK economy will be another area of focus and test for the new British PM. In spite of Brexit uncertainty that has shrouded Britain, the economy continued to perform.

Voter sentiment towards Boris Johnson’s victory and the new British PM’s stance on Brexit could be damaging, however.

With Johnson clearly looking to pull Britain out of the EU, deal or no-deal, domestic consumption could slump.

The British PM will likely need to put aside his own views on Brexit and deliver the best possible outcome for Britain.

If the lead up to the 2016 EU Referendum is anything to go by, this may prove to be a challenge. Talks of suspending Parliament and more could do far more harm now that Johnson has taken over the leadership of the country.

The Pound

At the time of writing, the Pound was up by 0.03% to $1.24427.

With a lack of stats to distract the markets, the focus will remain on Johnson and what lies ahead. More Conservative MP resignations would weigh on the Pound.

The markets will also need to consider any Brexit chatter. Will Johnson stand firm on his Brexit strategy or change tact on the 31st October deadline?

The EU hasn’t helped his cause as he enters number 10. This does suggest that Britain will get more of the same from the EU. That’s not a huge surprise…

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.