Markets calm as Sunak secures lead to be next prime minister

Following Boris Johnson dropping out

Markets have continued to react positively to the news that Boris Johnson has dropped out of the Conservative Party leadership race, leaving former Chancellor Rishi Sunak likely to become the next prime minister.

The pound spiked from $1.13 to $1.14 last night upon hearing the news that Johnson had withdrawn from the race, settling back at $1.13 as of time of writing. Gilt markets reacted very positively to the news, with ten-year gilt yields dropping from 4.1% to 3.8% upon opening this morning, before rising slightly to 3.9%. Two-year yields reacted similarly, dropping from 3.7% to 3.4% upon opening, before rising to 3.5% at time of writing. Moody's downgrades UK outlook to 'negative' amid political turmoil However, markets are still not fully recovered from the damaging months of econo...