Pound sterling lifted by reports of Andrea Leadsom quitting Tory leadership race

Sterling jumps more than a cent and a half to $1.3017 as traders deliver snap verdict on implications for economy

Sterling jumps against dollar in wake of Leadsom reports

The pound jumped against the dollar in the wake of reports Andrea Leadsom is pulling out of the Tory leadership context.

Sterling was trading at $1.2867 at 11.30am, when the rumours first emerged.

By the time the news was confirmed it had jumped more than a cent and a half to $1.3017, indicating financial market traders expect the rapid coronation of Theresa May as the next Prime Minister to be beneficial for the UK economy.

The pound had also shot up more than 1 cent against the euro to €1.177 by 12.30pm.

Up against the euro


 Reuters Eikon

Ms Leadsom's lack of top-level ministerial experience was seen by many in financial markets as a potential problem in the months and years of UK negotiations with the rest of the EU that lie ahead.

There are also concerns Ms Leadsom, a leading figure in the Vote Leave campaign, would be more likely than Ms May to deprive the UK of access to the EU single market.

Retaining access to the single market is the top priority of many UK exporters and foreign firms that invest in the UK. But it is seen as extremely unlikely the EU would allow the UK to retain access to the market while also curbing inflows of EU migrant workers, which was one of the major promises of the Leave campaign.

The FTSE 250 index, made up of mainly UK-facing companies, also got a lift from the reports, rising 1.45 per cent from 11.30am.

FTSE 250 also rises

The FTSE 250 took the brunt of the punishment after the 23 June referendum result, instantly sliding 14 per cent when markets opened on 24 June. The index is now trading around 4.25 per cent below its level on the day before the result was announced.