Pound rises and gilt yields fall as Sunak looks set for Number 10

At least PM-in-waiting Rishi Sunak knows he’s got the markets on his side.

After rival Boris Johnson pulled out last night, paving Sunak’s way to Number 10 – barring an unexpected upset from Penny Mordaunt – gilt yields have fallen appreciably, and the pound has made solid progress. Domestic-facing sectors like housebuilders and banks are also in demand and the FTSE 250, which has a more domestic focus than the FTSE 100, is also materially higher.

AJ Bell financial analyst, Danni Hewson, said: “Investors clearly hope Sunak will stabilise the economy and the political situation – though it’s hard to work out at this point which is the harder task.

“Assuming Sunak gets his coronation later today, attention will likely turn to the new fiscal plan set to be announced a week today on Halloween. Clearly the aim will be to avoid doing anything which might spook the market.

“As well as the recovery in sterling and the reduced cost of government borrowing, Sunak will be pleased to see European gas prices going in the right direction thanks to mild temperatures across the continent. And while the outlook is still filled with dark clouds, for the first time in a while it is possible to spy a chink of light.”