Pound rallies after Liz Truss resigns as U.K. prime minister
Global News
The pound sterling rallied in the U.K. ahead of the announcement Liz Truss would resign as prime minister following a tumultuous and short tenure in office.
Sterling rallied on Thursday as Liz Truss said she would resign as U.K. prime minister, brought down by her economic programme that sent shockwaves through the markets and divided her Conservative Party just six weeks after she was appointed.
The pound, which had rallied ahead of the news, was last up 0.35 per cent at US$1.1262. It also edged higher against the euro to last stand at around 87.08 pence.
British government bond yields were broadly lower as their prices rose, while shares in London rallied briefly.
A leadership election will be completed within the next week.
“The short timescales of the leadership contests are designed to minimise impact for the pound, but you would not want to be long (sterling) until we know who takes over,” said Kenneth Broux, currency strategist at Societe Generale.
Britain’s mid cap share index .FTMC briefly jumped 1 per cent as Truss spoke and last traded up 0.4 per cent, while UK blue chips .FTSE turned negative.
The 10-year gilt yield was a touch lower on the day at 3.86 per cent.
Truss’ resignation came a day after a second top minister quit and rowing and jostling broke out among her lawmakers in parliament.