British pound gains after UK Prime Minister Boris Johnson announces resignation

Yahoo Finance's Akiko Fujita and Jared Blikre discuss the implications of Boris Johnson stepping down as the U.K.'s prime minister.

Video Transcript

AKIKO FUJITA: We are also watching the currency space today, specifically the pound Sterling there, which we saw jump in a big way this morning after UK prime Minister Boris Johnson officially announced that he is stepping down. He announced his plans to leave his post during an address from 10 Downing Street.

Here's specifically what he had to say.

BORIS JOHNSON: But of course, it's painful not to be able to see through so many ideas and projects myself. But as we've seen at Westminster, the herd instinct is powerful and when the herd moves, it moves. And my friends, in politics, no one is remotely indispensable.

AKIKO FUJITA: And Jared, you heard the prime minister say there, them's the bricks. Essentially, his time is up here. After days of mounting pressure, we're now talking about roughly 60 MPs, Members of Parliament, resigning within his own Conservative Party. And the question now becomes, number one, who is going to follow him?

But also, how long is he going to hang on, because he didn't give a specific timeline. Only to say that next week, there should be a little more clarity on the next steps at hand. We are expecting a new prime minister by September. But the question is going to be, will Boris Johnson be there to do the handoff or will he be ousted before that?

JARED BLIKRE: You know, Akiko, just taking a step back here for a second. As I recall, Boris Johnson was brought in with a Brexit mandate. And he fulfilled that mandate. And now I don't think his exit means the end of de-globalization. I think that trend is still in its infancy. But you think back about, what was it, 2015, 2016.

That was the era when Trump rose to fame for other reasons than being a TV star. And that also came hand in hand with the Brexit. So yeah, going forward, I think it's going to be interesting to see what new mandate is important to the British people here.

AKIKO FUJITA: Yeah, that's an interesting point. I mean, 2016 was that big year. Started with Brexit, which Boris Johnson was kind of the de facto leader of the movement. And then he stepped in to Prime Minister Theresa May's role who, by the way, had to resign because she couldn't fulfill this Brexit.

I don't know if we want to call it a mandate, but she did not basically make that smooth transition there. But, you know, this has been a long time coming, some would argue. One scandal after another for the prime minister. Of course, we had those reports that 10 Downing Street, they were holding parties at the height of the pandemic when they were requiring citizens to stay at home.

And then this most recent report about a senior who was appointed to this post with the prime minister reportedly knowing about a sexual assault history. So that was kind of the last straw. But this comes at a tough time for the economy. UK certainly not alone, but they are facing inflation at more than roughly 40 year highs.

We're talking about energy costs, obviously a big issue there. Cost of living crisis is what they're calling it over there. But the next prime minister certainly has his or her hands full.

JARED BLIKRE: Yeah. I saw someone tweeting that the [INAUDIBLE] was playing Benny Hill over the airwaves.