UK
Rishi Sunak has delivered his final address as PM from outside 10 Downing St following the historic loss for his Conservative party in the 4 July election. During his speech he apologised for the party's catastrophic performance, saying "I have heard your anger, disappointment and I take responsibility for this loss," He confirmed that he would resign as party leader, but not immediately. Instead, like John Major in 1997 he will remain in position until the contest to decide his successor has taken place. Says that incoming PM Sir Keir Starmer is a #"decent public-spirited man who I respect".
- Sunak is now at Buckingham Palace offering his resignation to the King. Starmer will then travel to meet with the King himself where the sovereign will invite the Labour leader to form a gov't in his name. Starmer will then travel to Downing St. as prime minister. The change in gov't will take place in a matter of minutes, in stark contrast to most other nations that see lengthy demissionary or 'lame duck' periods for outgoing gov'ts or presidents.
- With Sunak's resignation there will be a scramble among the few remaining Conservative MPs for the party leadership. While not market relevant, given the party will now sit in opposition for five years (at least), whether the Conservatives tack towards the pro-business centre-right or populist anti-immigration right could determine whether the party has a chance of winnng back power in 2029 or is destined for a decade or more in the wilderness.
Chart 1. Political Betting Market Implied Probability of Next Conservative Leader, %
Source: Smarkets
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