• Home
  • Pro
  • Partners
  • Help and support
  • English
  • Italiano
  • Español
  • Français
Pepperstone logo
Pepperstone logo
  • Ways to trade
    • Trading accounts

      Choose from two account types depending on your strategy

    • 24-hour trading

      Trade CFDs on key US shares 24/5.

    • Pricing

      Discover our tight spreads, plus all other possble fees

    • Trading hours
    • Maintenance schedule
    • Risk management
    • Funding and withdrawals
  • Markets
    • Forex

      Get great rates on majors like EUR/USD, plus minors and exotics

    • Commodities

      Trade on metals, energies & softs, with oil spreads from 2 cents

    • Cryptocurrencies

      Speculate on Bitcoin, Ether and more, with a trusted broker

    • Shares
    • ETF
    • Indices
    • Currency indices
    • Dividends for index CFDs
    • Dividends for share CFDs
    • CFD forwards
  • Trading platforms
    • TradingView

      Trade through supercharts with tight spreads

    • MetaTrader 5

      Explore the apex in trading automation with our execution tech

    • The Pepperstone platform
    • MetaTrader 4
    • cTrader
    • Trading tools
  • Market analysis
    • Navigating markets

      Latest news and analysis from our experts

    • The Daily Fix

      Your regular round-up of key events

    • Meet the analysts

      Our global team giving your trading the edge

  • About us
    • Who we are

      Pepperstone was born from the dream of making trading better

    • Company news
    • Company awards
    • Protecting clients online
    • Trading accounts

      Choose from two account types depending on your strategy

    • 24-hour trading

      Trade CFDs on key US shares 24/5.

    • Pricing

      Discover our tight spreads, plus all other possble fees

    • Trading hours
    • Maintenance schedule
    • Risk management
    • Funding and withdrawals
    • Forex

      Get great rates on majors like EUR/USD, plus minors and exotics

    • Commodities

      Trade on metals, energies & softs, with oil spreads from 2 cents

    • Cryptocurrencies

      Speculate on Bitcoin, Ether and more, with a trusted broker

    • Shares
    • ETF
    • Indices
    • Currency indices
    • Dividends for index CFDs
    • Dividends for share CFDs
    • CFD forwards
    • TradingView

      Trade through supercharts with tight spreads

    • MetaTrader 5

      Explore the apex in trading automation with our execution tech

    • The Pepperstone platform
    • MetaTrader 4
    • cTrader
    • Trading tools
    • Navigating markets

      Latest news and analysis from our experts

    • The Daily Fix

      Your regular round-up of key events

    • Meet the analysts

      Our global team giving your trading the edge

    • Who we are

      Pepperstone was born from the dream of making trading better

    • Company news
    • Company awards
    • Protecting clients online
GBP

A traders' guide on the UK Tory leadership battle

Chris Weston
Chris Weston
Head of Research
Oct 21, 2022
Share

The link between politics and financial markets is always fascinating viewing, often leading to headline-driven markets and increased intraday volatility. This coming week this dynamic will been seen full force and will be a major theme for FX and equity index CFD traders.

Let the battle for the new PM commence

On Monday at 2 pm, all 357 Tory MPs have a chance to vote for their preferred PM candidate. The threshold to get on the ballet is a lofty 100 votes – a very high hurdle rate by historical standards, purposely designed to get to three candidates and to ensure a quick result.

On the same day, there will be another vote by MPs, and we should be left with just 2 candidates.

MPs will then be asked for their vote to offer an indicative position and provided there isn’t a landslide on the cards, the full Tory membership (there are over 170k members) will come into play and be asked to cast an electronic vote on Friday to decide who leads the Conservative party.

There will be a process of assigning the cabinet and all eyes fall on whether Jeremey Hunt continues as Chancellor.

The runners and riders

Rishi Sunak is the clear favourite according to betting markets and he will feel confident of once again picking up the most votes, at least from the MPs. Penny Mordaunt and Ben Wallace will fancy their chances, but their count depends on Boris Johnson, fresh from his Caribbean holiday, and his share of the 357 votes.

Could we be realistically facing a Sunak vs Johnson tussle??

This seems an elevated scenario and to the neutrals, this is a mouth-watering proposition – there is so much bad blood between the two and if there were to be a live public debate then it would have been champagne TV.

While Sunak would feel a sense of schadenfreude from economic predictions of the Truss stimulus, he is by no means home and dry. A recent YouGov poll of 530 Tory members showed that 32% of respondents thought Boris Johnson would be preferred PM, with Sunak commanding a 23% share. Therefore, provided Boris Johnson gets the 100 MP votes, he’d be quietly confident of regaining his position as PM and taking the Conservative party to the General Election by 2025.

How to trade the news flow?

Perhaps the most important factor is whether the new fiscal statement is handed down as scheduled on 31 October, with the OBR forecasts also due. The market is bracing itself for significant spending cuts and higher taxes to balance the UK’s finances – subsequently, if there is any doubt around Hunt’s role as Chancellor and the ability to hand down a frugal and austere plan, then we could easily see increased GBP volatility.

The shock factor - All candidates will not want to rock the boat too greatly – they are now only acutely aware of the power the capital markets wield if they don’t like what they hear.

Also consider how the leadership process and budget shapes expectations for the 3 November BoE meeting - a smooth transfer of power and an uneventful budget could see the market swing to a consensus view that the BoE hike by 75bp hike – which could weigh on the GBP, certainly vs the EUR and CAD.

That’s a big ‘if’ of course, as these things are rarely smooth!

With a big week ahead for GBP traders, what’s your position?

The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.

Other Sites

  • The Trade Off
  • Partners
  • Group
  • Careers

Ways to Trade

  • Pricing
  • Trading Accounts
  • Pro
  • Active trader Program
  • Trading Hours

Platforms

  • Trading Platforms
  • Trading tools

Markets and Symbols

  • Forex
  • Shares
  • ETFs
  • Indicies
  • Commodities
  • Currency indicies
  • Cryptocurrencies
  • CFD Forwards

Analysis

  • Navigating Markets
  • The Daily Fix
  • Meet the Analysts

Learn to Trade

  • Trading Guides
  • Videos
  • Webinars
Pepperstone logo
support@pepperstone.com
0035725030573
195, Makarios III Avenue, Neocleous House,
3030, Limassol Cyprus
  • Legal documents
  • Privacy policy
  • Website terms and conditions
  • Cookie policy
  • Sitemap

© 2025 Pepperstone EU Limited
Company Number ΗΕ 398429 | Cyprus Securities and Exchange Commission Licence Number 388/20

Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.1% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Trading derivatives is risky. It isn't suitable for everyone and, in the case of Professional clients, you could lose substantially more than your initial investment. You don't own or have rights in the underlying assets. Past performance is no indication of future performance and tax laws are subject to change. The information on this website is general in nature and doesn't take into account your or your client's personal objectives, financial circumstances, or needs. Please read our legal documents and ensure you fully understand the risks before you make any trading decisions. We encourage you to seek independent advice.

Pepperstone EU Limited is a limited company registered in Cyprus under Company Number ΗΕ 398429 and is authorised and regulated by the Cyprus Securities and Exchange Commission (Licence Number 388/20). Registered office: 195, Makarios III Avenue, Neocleous House, 3030, Limassol Cyprus.

The information on this site is not intended for residents of Belgium, Spain or the United States, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.