By Samuel Indyk
Investing.com – The investigations into alleged parties at UK Prime Minister Boris Johnson’s residence during COVID lockdowns took another twist on Friday after the Metropolitan Police requested that Sue Gray makes “minimal reference” to events they are investigating.
“For the events the Met is investigating, we asked for minimal reference to be made in the Cabinet Office report,” the Met Police said in a statement. “The Met did not ask for any limitations on other events in the report, or for the report to be delayed, but we have had ongoing contact with the Cabinet Office, including on the content of the report, to avoid any prejudice to our investigation.”
On Tuesday, the police force announced they had begun their own enquiry into the ongoings at 10 Downing Street which may have delayed the publication of the Sue Gray report, which had initially been expected some time this week.
Prime Minister Boris Johnson has been under pressure from the opposition and even some of his own MPs to resign following the allegations of rule-breaking, however, Johnson has repeatedly told those who requested him to resign to wait until the report is released.
Impact on markets
At the moment, the uncertainty is having little impact on UK financial assets. GBP/USD has traded lower in recent days but that is more of a result of Fed policy and a stronger USD, rather than anything specifically UK-related.
If Johnson were to be ousted following the publication of either Sue Gray’s report or the investigation by the Met Police, there are a number of potential candidates ready to take over.
Foreign Secretary Liz Truss is seen as a popular candidate amongst Conservative Party members while Chancellor of the Exchequer Rishi Sunak is also waiting in the wings. Sunak shot to fame when COVID struck, announcing a string of measures to attempt to keep businesses afloat and citizens with funds in their pocket.
However, he came under criticism in recent weeks amid reports that up to £5 billion could have been stolen from the COVID support programmes.
Although no impact has been seen in the Pound yet, if Sunak does take over the premiership, then his differing views from Johnson may end up having an effect later on this year.
“Mr Sunak may well differ from PM Johnson’s ‘boosterism’ strategy and look to tax and spend less than current government policy prescribes,” ITC Markets Europe and Americas Head of FX Robert Hoodless said last year. “The Chancellor is also known for a more Thatcherite intention of deregulation and a freeing from European rules. Such a political change later on in the year may have implications for the Pound.”