House builders and mining companies are weighing on the FTSE, the latter sliding because of a drop in metals prices over the last few days, the former because of a 0.3% decline in UK house prices in June. However, the case for property companies is actually less negative than investors have anticipated as UK house prices have risen by 5.7% in the last three months compared with same period in 2018.
The FTSE is faring worse than its European peers as shifts in domestic politics and at the helm of the European Commission spell difficulties ahead.
Tories preparing for general election in the autumn?
Of the two candidates for the Tory party leadership Boris Johnson now looks firmly in the lead but if he does take over as the head of the party and becomes Prime Minister it remains to be seen if he – or Jeremy Hunt for that matter – will be able to hold onto this position. MPs from his own party are expecting that there will be a call for a general election once he arrives in Downing Street and they plan to spend the summer preparing for an election possibly as soon as October.
With this much political upheaval there will be no time to actually negotiate a Brexit agreement with the EU before the end of October meaning that the country will be heading for a no-deal Brexit. The pound is sliding lower against the dollar today, but the decline is tempered by expectations that MPs will somehow put the brakes on the no-deal Brexit before it is too late.
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