British stocks rose after the announcement of Boris Johnson’s resignation as Prime Minister.
The FTSE 100 index, which combines the top 100 stocks on the London Stock Exchange, was trading up just over 1% in opening hours.
The British pound also edged higher, trading 0.75% higher at $1.20, retreating slightly from two-year lows hit earlier this week.
The British economy still faces serious challenges as it struggles with high inflation, slowing growth and a cost-of-living crisis.
Walid Qudmani, chief market analyst at XTB, wrote in a note to clients that the pound “remains very weak due to the dire state of the UK economy, which is underperforming its peers. [e] likely to go into recession as the Bank of England refuses to raise interest rates aggressively to combat rising inflation.”