UK political crisis: 5 things you must know
PremiumAs the UK political crisis goes deeper, here are five things you must know.
The uncertainty surrounding the British economy—which is already under pressure due to inflation that is on track to reach double digits, the possibility of a recession, and Brexit—has increased with the departure of UK Prime Minister Boris Johnson.
Boris Johnson resigns as UK prime minister
In response to requests from his Conservative Party's legislators and other ministers, British Prime Minister Boris Johnson announced on July 7 that he was stepping down from the position.
Johnson earlier promised to address the nation today. Despite the resignation of some of his top ministers, Johnson had managed to maintain his position of authority. Johnson was openly asked to resign on Thursday by the man he hired as finance minister less than 48 hours ago.
Indian-origin Rishi Sunak may become next UK PM
On July 5, Sunak resigned as the finance minister.saying the British public "rightly expect government to be conducted properly, competently and seriously". Sunak was the front-runner to succeed Johnson until 2021. He received plaudits for a coronavirus economic rescue package that included an expensive initiative to keep jobs and prevent mass unemployment. Johnson chose the 42-year-old, who was then given his first full cabinet role in February 2020 as Chancellor of the Exchequer.
Effect on the UK market
In early trading, UK stocks gained more than 1%, and the pound surged toward $1.20, despite the continued economic crisis continuing to put pressure on the currency. Following a recent severe decline, stocks rallied on July 7, but recession concerns persisted, with the euro stuck near 20-year lows and crude trying to recover from this week's heavy selling.
As traders followed developments in Westminster, where Boris Johnson was rumoured to have decided to step down as head of the ruling Conservative Party, the FTSE in London increased by more than 1%, and the pound edged up marginally.
Sex scandals
A string of sex scandals involving Tory MPs contributed to Boris Johnson's problems and were one of the key causes of the government's downfall. A former MP was sentenced to 18 months in prison in May for sexually assaulting a juvenile boy, and one MP was detained on suspicion of rape. Johnson apologised and admitted that selecting Chris Pincher to his government in February was a mistake on July 5. Johnson was made aware of the allegations of Pincer's alleged sexual assault before his appointment.
A wave of resignations
On July 5, Rishi Sunak, the finance minister, and Sajid Javid, the secretary of health, decided they had had enough of defending the scandals. Johnson was informed that his position is untenable as a result of a number of other junior ministers, ministerial assistants, and other Cabinet members who followed suit.