After Boris Johnson dropped out of the Tory leadership race, leaving Rishi Sunak as the favorite to become prime minister, the pound has reportedly gained on the dollar.
On Monday morning, sterling stood around 0.4% higher at $1.135. Last week, it fell as low as $1.11 amid continued political uncertainty and fresh warnings about the UK economy.
How Rishi Sunak emerged as the clear front-runner
Britain’s former Chancellor of the Exchequer; Rishi Sunak had on Sunday emerged as the clear front-runner to be the country’s next prime minister after Boris Johnson dramatically dropped out of the race to be Conservative Party leader.
The current PM Liz Truss resigned last week after just six disastrous weeks in office. Graham Brady, the Conservative official responsible for the leadership contest, had said a new prime minister will be in place by Friday.
Candidates to replace Truss have until 2 p.m. (9 a.m. ET) on Monday to secure the support of 100 Conservative Party lawmakers to enter the race to become the party – and the country’s – new leader.
Johnson’s decision to withdraw from the contest leaves Sunak competing against Leader of the House of Commons Penny Mordaunt.
Mr. Johnson, who claimed he had the support of 102 MPs although only 57 MPs did so publicly, dropped out after saying he would be unable to unite his party.
Commons Leader Penny Mordaunt remains in the race but is some way off from securing 100 backers. The deadline for her to do so is 14:00 on Monday.
What Happens if both secure the backing of 100 MPs?
If both candidates secure the backing of 100 MPs, it will then be up to the roughly 172,000 members of the Conservative Party to pick the new leader in online voting.
However, as of Sunday evening, Rishi Sunak was the only one of the pair to have met the necessary threshold of 100 nominations.
If he remains the only one to have reached this number of backers, he will automatically become the Conservative Party’s new leader. The party’s parliamentary majority ensures he will also become the country’s next prime minister.