Theresa May has been appointed as the new Prime Minister of the United Kingdom, only the second woman PM in the history of the UK.
As she begins post Brexit there will be no time for May to relax as there are pressing issues to be dealt with as soon as possible.
She will need to appoint a team to lead the process of exiting the EU. Apparently May has ordered civil servants to start hunting for a building to house the many people who will be tasked with working out how to get the UK out of the European Union. This is a good sign for the people of the UK as their uncertainty may begin to subside. However there will also be great pressure on the new Prime Minister from the EU to invoke Article 50 and begin the formal process of leaving the EU. May has said she won’t trigger Article 50 to start Britain’s departure from the EU until at least 2017, with the process due to take two years. This allows her at least 5 or 6 months to decide her action on issues surrounding Brexit.
Brexit means leaving the EU but it is still uncertain whether the UK will exit from the single market or an end to free movement of people in and out of the UK. On discussing the impact of Brexit, May has said: “We need to get the best deal in trade and in goods and services. Services are hugely important to us in the United Kingdom. But I am very clear that the Brexit vote was also a message that we need to bring control into free movement. Free movement cannot continue as it has done up till now.”
The UK has lost its last AAA rating and the pound has dipped to a 30-year low against the dollar. The “punishment budget” seems to have gone away, but what will Mrs May’s Chancellor do to counter or prevent the treasury predictions that house prices would be hit, the country would fall into recession and families would be £4,300 poorer by 2030? She was in the camp that cautioned of this approaching catastrophe and now she has to be the one to stop it. May has ruled out an “emergency budget” in the aftermath of the Brexit vote, but the so-called ‘Autumn Statement’, where the U.K. chancellor updates lawmakers on the government’s budget and spending plans, should take place as normal. In her campaign launch speech May ruled out tax increases before 2020, saying “they would disrupt consumption, employment and investment.” This sounds like a promising start of her reign for the UK people however depending on how the economy performs in the coming months she may not have much choice but to increase some taxes to counter an impending recession.
What’s To Come
Now we wait for news of Theresa’s May decision of who is going to be appointed to her new cabinet. Sky’s Political Editor Faisal Islam said: “One in three cabinet members are women right now. It looks like she’s going to try to push that up to half – that would be five more cabinet ministers who are women.
The action on currency markets over the last 24 hours has seen sterling continue to trade higher from its recent lows. The removal of uncertainty over who the next UK Prime Minister will be has provided some supportive news to the currency in recent days.
In level terms, the gains for sterling have seen the GBP/USD pair regain the $1.32 level, even briefly testing above $1.33 overnight. The improvement in sterling’s fortunes is also apparent in the EUR/ GBP cross which has dropped back below the 84p mark to trade closer to the 83p level. However, against the backdrop of heightened uncertainty post the Brexit referendum, sterling remains vulnerable to further downside. Tomorrow’s BoE meeting could also result in some additional downward pressure on the currency.
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