Boris Johnson: MPs Choice or People’s Choice?
The Conservative party has a new leader, and Britain has a new Prime Minister, and his name is Boris.
Boris Johnson, likes to be a bit of a showman, but demonstrated in his previous role as Foreign Secretary, that he’s not a ‘details’ person, which may be part of the reason why his current stance on taking Britain out of Europe is to do so on 31st October, with or without a deal, and despite the consequences.
Johnson’s recent speeches attempt to demonstrate to the EU that Britain is on the front foot and Johnson believes the EU will re-open negotiations, even though they have shown no willingness to do so. Despite this, Mr Johnson has made dropping the Northern Ireland backstop a precondition for reopening talks.
Johnson’s rather aggressive style of rhetoric seems to have made him a popular choice with politicians, resulting in him inheriting the Prime Minister position, Brexit entrails and all, but it remains to be seen whether or not the British people consider him worthy of the position and whether they would actually elect him to the post.
The frightening thing is that Johnson’s popularity among the political ranks could garner enough support to see a no-deal Brexit becoming a real possibility even with the speaker of the house strongly opposing it.
Under the Fixed-Term Parliament Act of 2011, Boris Johnson will remain Prime Minister until 2022 when the next general election is due unless there is a vote of no-confidence initiated by the Labour party.
Labour has strongly hinted that it will pursue a vote of no confidence when parliament returns in September but, with Jeremy Corbyn’s unpopularity, this may not benefit Labour and might even see them lose their position as the main opposition party. It is difficult to believe that Labour would make such a move simply out of an altruistic belief that removing Boris Johnson as Prime Minister might actually be good for the country.
If Labour are successful with a vote of no confidence, the other fear is that dissolving parliament ahead of 31st October might see Britain sail through the Brexit deadline without anyone to stop it and end up without a deal anyway.
Boris Johnson’s pronouncements about Brexit, and his commitment to leave the EU at the end of October with or without a deal, caused renewed worry in the markets. Concerns that a no-deal Brexit, might have negative consequences for UK jobs, consumers and the economy, led to an already weakened Pound taking a further nose-dive to levels last seen after the 2016 Brexit referendum with the Pound ending the month over 4% lower against the Dollar.
In other news…
World Equity Markets
Despite Sterling taking a hit, the UK was the best performer in local currency terms, rising by more than 2%, but the Pound’s fall, particularly against the Dollar, meant sterling investors found better returns in the US market.
European Equity Markets
July saw a reversal of recently trends with peripheral Southern and Eastern states outperformed major economies. In the EU, the increasing likelihood of a disorderly Brexit weighed on investors’ minds leading to mildly positive performance compared to other major markets.
Emerging markets, although lower overall, provided some of the best gains in Europe, as investors cast their net wider in the search of positive returns.
Trade disputes negatively affected Asian and South American emerging markets, with nothing positive from Trump and Xi who were expected to revive SinoUS trade talks, and the start of a trade dispute between Japan and South Korea, with South Korean consumers boycotting Japanese goods after Japan tightened export curbs on South Korea in June.