The pound rose significantly as markets reacted to the removal of uncertainty regarding who would become the next Prime Minister, with Theresa May poised to take on the role.
After the exit of Andrea Leadsom from the Conservative Party leadership contest, sterling rose 1.3% against the dollar to $1.3162, and was 1% higher against the euro at €1.1874.
The FTSE 250 index rose 129.35 points, or 0.8%, to 16,835.74, while the FTSE 100 share index hit an 11-month high before falling back to stand at 6,683.28.
‘Theresa May’s virtual ‘coronation’ as Prime Minister has delivered a boost to the pound as the clouds of uncertainty following the Brexit vote start to disperse,’ said Neil Wilson, markets analyst at ETX Capital. ‘The leadership question has been settled, and two months earlier than markets had been anticipating. This is feeding into strong bids for sterling and property stocks as investors eye potential bargains.’
In other positive economic news, German industrial giant Siemens has indicated that it will continue to invest in the UK despite previous warnings that Brexit could affect its manufacturing business here.
Siemens has 13 plants in the UK and employs around 14,000 people. Chief executive Joe Kaeser told a number of media organisations that the company ‘remained fully-committed to manufacturing in the UK’.