Pound nears lowest since pandemic amid more chaos for Boris Johnson :: InvestMacro

Written by George Pryor

– The British pound fell against the US dollar and the main UK FTSE index fell amid the uncertainty coming from the administration of Prime Minister Boris Johnson.

British Health Minister Sajid Javid said in a tweet that he had resigned from the Johnson government and that he had lost faith in the Prime Minister. Meanwhile, Treasurer Rishi Sunak announced his resignation on Tuesday.

The pound was down 1.4% immediately after the news, having earlier fallen as much as 1.8% to 1.1899, its lowest level since March 2020.

“Slow growth and other economic factors are likely to have a bigger impact on the pound,” says Nigel Green, CEO of deVere, one of the world’s largest independent financial advisory, asset management and fintech firms.

But there is no escaping this fact, all this creates more uncertainty for the pound sterling. “

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Global investors were warned in late May to hedge against an “existential” crisis with sterling by Wall Street analysts as the British currency faces problems that usually only emerge in emerging markets.

While sterling gained 0.2% that month, it is still the third worst performing major currency this year. It weakened 8% to $1.2468 in 2022.

The CEO doubled down on a previous comment he made during the previous vote of confidence for Boris Johnson, indicating that he believed there would be a leadership challenge ahead of the next election.

When names are put into the ring to become the next leader, and the political agendas of the frontrunners are known, “sterling is set to become very volatile – just as it did during the Brexit negotiations,” he explains.

“The issues that Johnson’s potential successors have revealed that will affect the pound include the UK’s relationship with the European Union and access to the single market, fiscal stimulus and the Northern Ireland Protocol, among others.”

Nigel Green concludes, “The pound is currently losing popularity for a myriad of reasons, including politics.

“This, in turn, will be in the interest of the dollar, the euro and others.”


deVere Group is one of the world’s largest independent advisors for specialized global financial solutions to high-income and high-income international and local clients. It has a network of more than 70 offices worldwide, more than 80,000 clients and $12 billion under advice.

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