Sterling Surges, UK Stocks Enter Bull Market After Andrea Leadsom Quits UK Leadership Race

Update 2: more details from the WSJ:

Andrea Leadsom, one of two contenders to replace David Cameron as leader of the Conservative Party and prime minister, on Monday pulled out of the leadership race. Ms. Leadsom’s exit appears to clear the way for Home Secretary Theresa May to become the next U.K. prime minister. Ms. Leadsom said a nine-week leadership election was “highly undesirable” and that Britain needs a new prime minister as soon as possible. She added that she was giving her full support to Ms. May.

 

The British pound surged on the news.

 

The withdrawal comes after a weekend of controversy in which Ms. Leadsom appeared to suggest her rival, Ms. May, wasn’t as qualified because she didn’t have children. According to a transcript of an interview with the Times of London newspaper, the 53-year-old Ms. Leadsom said she didn’t want the conversation in the campaign to be about how she has three children while Ms. May, 59, doesn’t have any.

 

“But genuinely I feel being a mum means you have a very real stake in the future of our country, a tangible stake,” Ms. Leadsom said. “She possibly has nieces, nephews, lots of people, but I have children, who are going to have children, who will directly be a part of what happens next.”

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Update: it is confirmed and Leadsom is indeed out of the race leaving just Theresa May in the running.

 

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And so there was one.

With the race for next Tory leadership and the next UK prime minister all down to two women, Theresa May and Andrea Leadsom, moments ago both BBC and Sky News reported that in a statement due shortly, Andrea Leadsom would announce she was quitting the UK leadership race...

... which means the only candidate to be Britain’s next prime minister would be the soft pro-remain candidate Therea May.

Understandably, the expectation that the next UK prime minister is someone who is for the UK remaining in Europe, has sent not only sterling surging, now higher by over 100 pips in the past few minutes, wiping out all losses against the USD despite expectations of an imminent rate cut by the BOE, but more notably the FTSE-100 UK stock index, to a new bull market, up some 20% from the February lows:

  • FTSE 100 RISES 20% FROM FEBRUARY LOW, SET TO ENTER BULL RUN

It may turn out that the entire Brexit fiasco was nothing but one big distraction, even though it remains unclear just how Theresa May will undo the Brexit vote even if she wanted to.