Theresa May is going to be the new prime minister of the United Kingdom. It is also a fact that most people know what led to her becoming the prime minister. But for the sake of those that are not so conversant with developments in the United Kingdom or current affairs in general, I will give a little background of what led to her succeeding David Cameron as prime minister.
There were calls from UK citizen for the country to break away from the Euro block in which the country was a key player. The argument from this group of citizens was that the country will be better off being alone than being a member of the euro block. While the calls were going on, some citizens not in support of the break-away called for restraining and caution.
David Cameron being the then prime minister left with the task of conducting the popular Brexit referendum to decide whether the country will remain in the block or pull out. He, however, made his decision clear to the citizens and fellow politicians of his intention to resign as prime minister if the citizens voted to leave the block during the Brexit referendum.
Brexit Outcome and its Aftermath
Following the successful conduct of the Brexit referendum and the eventual outcome of the voting result, it became clear that majority of UK citizens voted in favor of the country breaking away from the Euro block.
The attention of the world then shifted from the outcome of the referendum to wanting to know how the decision will affect not just the Euro block but the world in general economically and financial.
There were fears of how the result will affect financial markets in Europe and the world in general. There were equally fears of what will become of the Pound Sterling and the Euro when compared to other major currencies of the world.
Financial Impact of Brexit on the Pound Sterling
Following the end of the referendum, the country’s currency gained slightly against the United States dollar and the euro. The currency also gained against other major world currencies. But there were fears whether this gains will be sustained or not following the change of power in the country, as a result of the resignation of David Cameron as prime minister and the coming to power of Theresa May.
This is due to the fact that she may likely introduce new economic changes and financial policies which could affect the country’s currency positively or otherwise.
"The economy does not need uncertainty, it needs security, so we put (May) as prime minister, that can lead our country and provide unity", the finance minister, George Osbourne was quoted as saying.
The index of the London Stock Exchange, FTSE 100, rose 1.4% and closed at its highest level in eleven months before the rise in property titles; while the pound, which had depreciated to its lowest level in three decades, recovered 0.4% to the US $ 1.30.
But the British currency could go back down owing to the possibility of the Bank of England announcing stimulus measures.
Banking sector stocks recorded slight gains 24 hours to the announcement of a new prime minister for the country and it is expected that these gains will continue not only in the banking sector but across other sectors of the economy as a result of the Brexit referendum and the coming into office of a new prime minister.
The shares of the royal bank of England recorded an upward gain, rising from 1.34pc to 181.7pc, Barclays bank shares were also on the rise as they gained 2.17pc.
Most of the FTSE 100 top gainers all enjoyed some improvement in the fortune of their stocks as they all closed trading on the positive side. The pound Sterling gained 2pc following the news that Theresa May will become the prime minister to trade at $1.3228 a day before she became the prime minister. Most stocks that have been on a downward trend started showing signs of recovery. It will be safe then to presume that even though there is still some uncertainty with regards to the Brexit outcome, the country may fare well economically in the days ahead to come.
LAWYERS: Can Backtrack
The referendum with which the British decided to leave the European Union was consultative so the Parliament must decide whether the UK should leave the bloc or no. This was contained in an earlier letter More than a thousand prominent lawyers in the country sent to David Cameron the immediate past Prime Minister.
The signatories recommended that legislators are free to vote before any leader makes the decision to invoke Article 50 of the Treaty of Lisbon. The letter is the latest attempt to slow the exit. The action has been criticized by advocates who believe that Brexit looks entangled political and legal challenges.
While the country's leaders have said they will respect the outcome of the vote, the government faces difficulties over whether it can start the process without parliamentary approval.