Yahoo Finance 7 things you need to know as May faces confidence vote
Today has been another dramatic day in British politics, after the news of an imminent confidence vote in prime minister Theresa May sent shockwaves through Westminster and the markets.
Here are seven things you need to know about the latest Brexit developments:
1. Britain’s prime minister could lose her job by midnight
Speculation has been brewing for months over a looming challenge to Theresa May’s leadership of the Conservative party, on which her role as prime minister ultimately depends.
Now the genie is out of the bottle after enough Conservative MPs decided to submit letters of no confidence in their party leader to trigger a ballot among MPs.
The vote of confidence will be held between 6pm and 8pm London time on Wednesday evening, with the result expected to be announced by 9pm. May needs to win the support of a majority of her own MPs to avoid a full-blown leadership contest against rival candidates for the top job.
2. Boris Johnson is the favourite to replace May if she loses
The bookmakers have the prime minister as the favourite to win the vote, as Yahoo Finance UK’s Oscar Williams-Grut reports.
The former foreign secretary Boris Johnson is the frontrunner among other likely candidates if she fails to win over enough MPs to remain in post.
Johnson is 6/1 to be the next prime minister, according to OddsChecker.com, which compares betting prices across a number of online bookmakers.
Former Brexit secretary Dominic Raab is 7/1 to be the next UK leader, followed by home secretary Sajid Javid.
3. Sajid Javid would be the City’s favourite next prime minister
Home secretary Sajid Javid would be the financial sector’s preferred candidate, according to a poll of City professionals.
Yahoo Finance UK surveyed a selection of financial analysts from stock brokers, banks and trading platforms on Wednesday morning. All named Javid as the preferred candidate.
“The main Remain-leaning pro-business Tory is Javid,” said Neil Wilson, the chief market analyst at Markets.com. “So I think the City would like him.”
4. Analysts fear Brexit could be delayed if May loses the vote
City analysts also told Yahoo Finance UK that Brexit could be delayed and Article 50 extended if May was ousted.
“One thing is clear: if Mrs May loses, Brexit will have to be delayed,” Fawad Razaqzada, market analyst at Forex.com, said on Wednesday morning. “Whoever the next PM might be, he or she will have to apply for an extension to Article 50 and push back the official exit date of 29th March.”
Andy Scott, associate director at financial risk consultancy JCRA, said: “If a former Remainer took the keys to Number 10, we would expect there to be a delay to Article 50 to allow time for further negotiations.”
5. The pound soared as Tory MPs publicly backed their leader
The announcement of a leadership contest might have been expected to push the value of the pound down still further, sparking even greater uncertainty about the future of Brexit.
The pound had already sunk to a 20-month low yesterday after May postponed a crunch vote she had been widely expected to lose in parliament on her withdrawal agreement with the EU.
But investors became increasingly confident throughout the day that May could survive, as a majority of her own MPs spoke out publicly in support of their leader.
The pound soared against the dollar (GBPUSD=X) and euro (GBPEUR=X), as Yahoo Finance UK’s Lianna Brinded reports.
Not all political analysts were convinced every MP would stick to their word however, given the secret ballot and leadership ambitions of many of her colleagues.
6. EU leaders want to give May a ‘helping hand’
EU leaders told Yahoo Finance UK’s Luke James they are ready to offer Theresa May a “helping hand” out of the political crisis over the Brexit deal to stave off the prospect of a no-deal divorce with the bloc.
May plans to travel to Brussels for crunch talks over Brexit at the European Council summit on Thursday, assuming she wins the vote of confidence among MPs,.
But her continental counterparts are keen to send her back to London on Friday with enough ammunition to allay rebel MPs’ concerns over the backstop and get the deal through parliament.
7. More and more businesses are planning for no deal
The delay to the Commons vote on Theresa May’s deal and now a confidence vote in her leadership are further setbacks to businesses hoping for clarity on what form Brexit will take.
Firms are having “this realisation that they’re not going to get any certainty anytime soon,” said Hannah Cool, a Brexit expert at KPMG.
“What we’ve ended up with is a period where clients don’t care about the politics anymore … Now they’re planning for the worst-case scenario of [a] no-deal.”
READ MORE: What is a no-deal Brexit? Everything you need to know
Yahoo Finance UK’s Alanna Rousseff reveals how growing numbers of firms are now triggering their contingency plans, putting jobs at risk as companies start to move operations from the UK into the European Union.
Edmund Heaphy also reports how the UK would be far from alone in suffering from a no-deal Brexit, with fresh predictions it could have Irish GDP next year.
