07 Jul

Boris Johnson’s departure will boost pound: deVere CEO

July 7, 2022

By George Prior 

– The pound will “finally stabilise” after a brief period of volatility when UK Prime Minister Boris Johnson leaves office, affirms the CEO and founder of one of the world’s largest independent financial advisory, asset management and fintech organisations.

The analysis from Nigel Green of deVere Group comes as Boris Johnson is desperately clinging to power after a slew of resignations from his government. The UK currency is currently trading around the weakest level since early 2020.

He says: “Johnson has made it clear in Parliament that he had no intention of stepping down, but it increasingly looks like the decision is no longer his after an unprecedented avalanche of resignations from his own ministers.

“This is the beginning of the end for Johnson’s administration, and it is a question if ‘when’ not ‘if’.”

He continues: “When Johnson does leave Number 10, we’re confident it will ultimately give the pound a boost.

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“Sterling has been one of this year’s worst-performing major currencies, down more than 10% against the dollar, amid concerns about a severe economic slowdown, red-hot inflation and, yes, the swirling political chaos, primarily centred around the Prime Minister.”

In the media on Wednesday, the deVere CEO was quoted as saying that when names are put into the ring to become the next leader, and policy agendas of the frontrunners are known, “the pound can be expected to become highly volatile – just as it did during the Brexit negotiations.

“The issues laid bare by Johnson’s possible successors that will impact the pound would include the UK’s relationship with the EU and single market access, fiscal stimulus and the Northern Ireland protocol, amongst others.”

However, Nigel Green says following this bout of turbulence triggered by uncertainty, “we can expect the pound to finally stabilise.”

He notes: “A strong and stable leadership is likely to get the pound back on track to a large extent.

“Currencies typically like strong, unifying leaders. The current politics around Boris Johnson is toxic; it’s a distraction and makes an already weak pound weaker.

“Clearly there are other contributing issues to the weakness, but make no mistake, Johnson’s shenanigans are a major factor.”

In addition, the deVere Group CEO goes on to say, the European economy’s possible looming recession is “going to hit the euro, which is likely to lift the pound.”

He concludes: “The Boris issue has dragged on the pound for a year or so – this weight could be lifted if he is replaced by a more stable and sensible leader.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

 


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