Economy  

Advisers call for stability after cabinet chaos

Advisers call for stability after cabinet chaos
Media gather outside 10 Downing Street today (July 7)

Boris Johnson should not be replaced immediately as leader of the Conservative party as the country needs consistency, an adviser has said.

Following the news this morning (July 7) that the prime minister is set to resign but intends to stay until autumn while another leader is elected, financial adviser at PM Independent Financial Services, Peter Meadway, stressed consistency is needed.

“We can’t hand it over to someone tomorrow, it needs to be phased.”

In addition, founder of brokerage Riach Financial Advisers, Bob Riach, bemoaned the impact the leadership uncertainty will have on the housing market.

“[The personnel changes are] going to delay things.”

However, the change in leader should not have a huge affect on people looking to buy, he added.

“People will still want to buy a house. First-time buyers are not bothered with what’s going on with the government, they’re far more worried about interest rates.” 

Last night, Johnson fired levelling up secretary Michael Gove following the resignation of housing minister Stuart Andrew.

West Riding Personal Financial Solutions managing director, Neil Liversidge, said he will always be grateful to Johnson for getting Brexit done.

“When you look at what’s brought him down, it's a conglomerate of trivial issues…no boss in any job can continue if the people working under him have no confidence in them, no matter what they’re doing.

“It ended in a mess and he should have gone sooner. He covered himself in muck.” 

Financial markets did not experience any significant wobbles as a result of the past week of resignations, apart from a small jump in sterling after Johnson signalled his intention to resign.

The pound rose to $1.20 mid-morning, which in turn buoyed the FTSE 100 which is up 1.1 per cent.

Chief executive of Capital Asset Management, Alan Smith, said: “Politicians come, politicians go, the economy and the markets continue, regardless.”

Head of EMEA macro strategy at State Street, Tim Graf, said Johnson’s resignation has done little to change the “toxic mix” of rising household costs and slowing growth in the UK.

“Sterling could be better supported in the coming days with the removal of near-term political uncertainty, but I would see rallies as opportunities to sell given the prevailing economic malaise.”

Smith added: “Good advisers are currently at the forefront, communicating with their clients and reassuring them that regardless of short-term political instability their retirement plans are largely unaffected.”

'No more sweets to give'

Founder of Open Money, Anthony Morrow, said the prime minister’s resignation is unlikely to have much effect in the short-term.

“Markets are already volatile and actually a new PM is one of the least challenging issues right now.

“Going into summer and all we’re talking about is replacements and possible leadership strategies. It’s unlikely that anyone coming in is going to significantly change much in terms of policy, unless they do something about cost of living as a sweetener.”