The pound briefly retreated Thursday after UK finance minister Sajid Javid sensationally quit Prime Minister Boris Johnson’s government, dealers said. In stocks trading, London’s benchmark FTSE 100 index was down 1.4 per cent, mirroring sharp losses across Europe, on resurfacing fears over the global economic impact of China’s deadly virus outbreak.
Javid’s resignation meanwhile came two weeks after Brexit and a month before he had been due to deliver his first annual budget on behalf of Johnson’s Conservative administration. Johnson appointed senior Treasury official Rishi Sunak to succeed Javid as chancellor of the exchequer.
“Volatility has been injected into the markets on the back of the news that Sajid Javid, the chancellor, has resigned,” CMC Markets UK analyst David Madden told AFP.
“The news caught traders by surprise. Sterling has the biggest reaction to the news -- it initially sold-off, but it since recovered all the lost ground and is now back above the pre-announcement level.”
British news agency the Press Association quoted a source close to Javid as saying he resigned after refusing to carry out Johnson’s demand that the chancellor sack his entire team of aides. Global stock markets meanwhile slide on Thursday after a dramatic spike in the number of coronavirus deaths and cases in mainland China, with traders concerned about the economic impact.
“Stock markets have moved into retreat... On coronavirus headlines,” noted IG analyst Chris Beauchamp. Chinese authorities have changed the way they count infections from coronavirus — officially named COVID-19 — and the latest reports propelled the nationwide death toll to 1,355 and the infection count to nearly 60,000.