Natasha Prayag
By Natasha Prayag

Boris, Brexit and the great beyond

It’s official. The UK has a new Prime Minister. Now what?

Alexander Boris de Pfeffel Johnson, former London Mayor and professional blusterer, received the nod from Her Majesty the Queen on Wednesday to take up residence of Number 10.

Whatever you think about his politics (and personality), this is the man who is set to take the UK into the unknown of a post-European Union future.

So, what do we know about Boris? He comes from a long line of Eton and Oxford educated PMs – David Cameron being the latest – and was born on the Upper East Side of New York. He has a chequered history as a journalist and got stuck sliding down a zip-wire over the Thames.

Perhaps more pertinently, he has just over three months to get the UK out of a 45-year relationship with the EU.

However, already there are moves afoot that could trip him up en route. Upon his coronation, the Labour Party announced it was considering trying to force a general election to force Boris and pals out of power.

Your capital is at risk

But it’s not that straightforward. Were an election to be called, with both Labour and the Conservatives polling 25% of the UK vote (or less), it’s likely neither would get an overall majority. So, it would be a race to the finish to see who could set up a coalition government with the other parties in Westminster… and it’s not the friendliest place at the moment.  

But Boris might not have to wait for a general election to lose the power he just gained. Barely hours after he had given his acceptance speech, the PM had already lost three members of his cabinet. These guys said they would not work alongside a leader who would agree to “no deal” and retreated to the back benches – potentially avoiding being reshuffled” by the PM. But Boris may face a more pressing problem.

After the General Election of 2017, which saw the Conservative majority sliced to a wafer, then PM Theresa May needed the support of the Northern Irish DUP MPs to regain power.

While the DUP have said (for now) that they are willing to keep on with this arrangement, one of the key issues for them is the treatment of Northern Ireland. Should Boris fail to figure out a way to avoid a hard border between it and the Republic, the DUP might wander off into the sunset, leaving him without a majority.

Before even that, however, Boris might have problems closer to home.

Your capital is at risk

2019 has been a year of defections, with Labour and Conservatives slipping out of their own parties to form a new one, and one even getting into bed with the Liberal Democrats.

Should one or two more decide to cross the floor, Boris would need to do some quick thinking to find some more pals to support him. The Scottish Nationalist Party, Lib Dems and Greens are staunchly anti-Brexit so no luck there, and hell would have to freeze over before Labour joined the Tories.

So, what does this mean for investors?

The day Boris won the leadership election, the FTSE100 rose a couple of points. Great? Kinda. It was mainly off the back of sterling falling against the dollar, which made UK stocks cheap. But also, for the moment – and it might be very brief – there is certainty of something, and markets love certainty.

How long this certainty will last, no one can tell. So, hold tight. We could be in for a bumpy ride. 

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