Morning Brief – Tuesday 28th

One May too many:

Surviving a third May proved to be too much for the British Prime Minister who, on Friday, announced her resignation in front of 10 Downing Street. Following a meeting with the chairman of the 1922 committee, she was left with no choice but to announce her defeat to the nation. Chosen as leader of the Conservative party following the resignation of former Prime Minister David Cameron, Theresa May served one of the shortest and most divisive terms in office. In fact, at the time of her resignation she stood shy of Gordon Brown’s 2 years and 219 days in office. Perhaps a departure date of 7th June was a concession offered by Sir Graham Brady in order to survive in office longer than the ill fated premiership of former Labour Chancellor!

Even with her departure date set in stone and despite a smattering of newsworthy events over the weekend, not least the European Parliamentary Election results, Theresa May is still receiving headlines as a controversial leader. There appeared to be a warm reaction to May’s tearful departure, with the public reflecting upon the tough time she had spent in office and the near-impossible task that lay before her in 2016. However, as the dust has settled, this sympathy hasn’t stuck.

May’s involvement of her cabinet often left few supporters fighting her corner. Alongside David Cameron, and presumably her successor, she will go down as one of the Brexit Prime Ministers. With this in mind, it is mesmerising to thing that it took 18 months for her original cabinet to be consulted on the government’s Brexit plan, despite red lines being drawn unilaterally across one another left, right and centre. Even the Democratic Unionist Part, the Northern Irish party propping up the Conservative minority government, was consulted but not included in the debate.

Much as when Theresa May faced calls for resignation, votes of no confidence from her own back bench and from across the isle, there are few officials singing her praises today. With nine leadership bids cast in the ring (Gove, BoJo, Raab, Hunt, Leadsom, Stewart, McVey, Hancock, Javid) and several more hopefuls twitching in the wings, the Pound will watch closely who will take over the position and the consequent most likely course of Brexit.

The EU election results are in and seismic shifts through the Union are apparent. The most radical changes since the last election in 2014 have come from Denmark and the United Kingdom albeit in diametrically opposed directions. In Denmark, PM Lars Lokke Rasmussen of the centre-right Liberal Party, consolidated a large majority in the elections. To the surprise of markets who were eyeing a shaky national election on June 5th, the anti-immigration Danish People’s Party lost more than 50% of its electorate at the polls in a political return to more traditional polling.

Amongst the UK electorate, on the other hand, the consolidation of separatist political movements was apparent, with Nigel Farage’s Brexit Party securing an impressive majority within the polls. The move is hardly surprising. Farage’s 6 week old party encompasses the entire package of values that UKIP espoused in 2014: let’s get out of Europe and then we’ll see. With his party securing 27% of the vote in 2014, it is unsurprising the former UKIP leader’s party secured almost a third of British ballots for his new party following 5 years of political frustration for the near four million people that voted last time around.

The major losses were to the UK’s heavyweight political parties: the Conservative and Labour parties. With the resignation of the Prime Minister on the same day as the British ballot, a shocking performance for the Tories is to be anticipated. As the vote count stands so far, the governing party is looking at losing nearly 15% of the vote versus half a decade earlier. Capitalising on traditional parties’ lack of vote share was the Liberal Democrats, almost tripling their vote share this weekend. The picture is clear; the nation remains as divided over a single-policy issues as the 52:48 divide told us three years ago. Jeremy Corbyn, Labour leader, in response to this lesson has suggested this weekend that any Brexit deal should be accompanied by a second referendum. Will the next Conservative leader and Prime Minister take a similarly unequivocal stance on Brexit? Unless they want to become the third Brexit Prime Minister, and certainly not last, they’d want to think carefully about it.

After a hellish May, the Pound continues its decline, digesting the European elections with little optimism. As UK politics stands directionless with no obvious leader, the Pound will struggle to find a confident bid.

Discussion and Analysis by Charles Porter

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