The Prime Minister made an emotional speech to the nation outside the doors of Number 10 this morning, her voice breaking as she described her “deep regret” at not being able to deliver Brexit for “the country I love”. Mrs May revealed she will stand down on June 7, paving the way for a leadership race to take control of the Conservative Party to commence the following week. Moody’s Investors Service today said uncertainty over who will become the next Prime Minister is “clearly credit negative”. Moody’s senior vice president, Sarah Carlson, said: ”Prime Minister May’s announcement today that she will resign on 7 June further amplifies the uncertainty around Brexit.
“The Prime Minister’s resignation also increases the risk of a no-deal Brexit that, as we have said before, would have significant negative effects on both the UK sovereign and a range of other issuers.”
In an emotional statement in Downing Street, with husband Philip and her closest aides watching on, Mrs May said it was in the “best interests of the country” for a new prime minister to lead efforts to deliver Brexit.
Her voice cracked as she said: “I will shortly leave the job that it has been the honour of my life to hold – the second female Prime Minister but certainly not the last.
“I do so with no ill-will, but with enormous and enduring gratitude to have had the opportunity to serve the country I love.”
The pound rose shortly after the announcement, climbing to €1.1357 against the euro and $1.2705 versus the US dollar.
Chris Towner, Director at JCRA, shared a similar sentiment to Moody’s and said there is now an increased chance of a further delay to Brexit.
He said: “Over the last few weeks Sterling has dropped as speculation has intensified that Theresa May needed to resign in order to clear the way for a new leader.
“This yet again increases the uncertainty.
“The chances of further delay to Brexit have now increased but so too have the chances of a hard Brexit.
“Although widely expected as she approached the podium, Sterling still managed to trade frenetically for a short period of time, before dropping back to a more settled level.
“Sterling is acting like a rabbit caught in the headlights. Unable to jump up or down.
“On the economic data front though, half an hour before her resignation retail sales were released showing volumes up 5.2 percent year-on-year. This is on top of a 44 year low in the unemployment rate.
“If only she could have brought the focus back to the economy, the exit may not have been so sad for her.”
Carolyn Fairbairn, CBI Director-General, said the resignation of Mrs May offers the opportunity for “a fresh start” on Brexit discussions.
She said: “The Prime Minister could not have worked harder to deliver a Brexit deal that protects the economy.
“She leaves office with the respect of business.
“But her resignation must be now be a catalyst for change.
“There can be no plan for Britain without a plan for Brexit.
Ian Strafford Taylor, CEO of currency expert FairFX said: “Analysts will be keeping a close eye on the reaction to today’s announcement, along with confidence and sentiment.
“The market will be looking at the strength of any new Prime Minister and potential political allies for the UK and the implications these could have on the economy.
“All that is certain is that the pound will continue to react to news.”