Investors facing fallout from political chaos

If ever there was a time when Britain was crying out for a government with authority and purpose it is now.

The crises are piling up, many the complex interacting consequences of that trio of seismic events, Brexit, the pandemic and the Ukraine war. Not least of these is the economy’s steady and apparently inexorable drift towards recession.

The financial markets gave their own vote of no confidence in Boris Johnson’s desperately weakened leadership this morning by marking the pound down another three quarters of a cent against the dollar.

There will be no respite. The extreme turbulence at Westminster will carry on for the foreseeable future and could even intensify after what is likely to be two disastrous by-election results for the Tories later this month.

Meanwhile Rishi Sunak’s in-tray will continue to pile up - inflation, borrowing, interest rates, tax, stalling growth, labour shortages - even as he is being sounded out as a leadership candidate should Johnson fall.

There’s nothing like having your mind on the job in a crisis.

One of the oldest clichés about the City is that is abhors uncertainty. But that is what it is going to get for the rest of this year.

That augurs very badly for the financial markets and the wider UK economy. The consensus seems to be that Johnson is now fatally wounded and it is a question of if not when.

In the meantime investors, consumers and businesses alike will have to find ways of coping with the fallout from perpetual political chaos.