British Foreign Minister Boris Johnson has resigned today following Brexit Secretary David Davis’ resignation late Sunday evening. Both Johnson and Davis were considered hard-liners in an increasingly public battle within Prime Minister Theresa May’s cabinet over the terms of Britain’s exit from the European Union.
The UK is due to leave the EU bloc on 29 March 2019 but needs to present a deal for ratification by EU national parliaments by October. The details of the deal have unleashed an increasing rift both within Thresa May’s government and among members of the public, particularly in the corporate sector.
Demand from the business sector to maintain free trade within Europe’s custom union has been gaining ground within May’s cabinet, but staying in the single market for goods, while excluding services (which make up 80% of the UK’s economy) along with restricted movement of labour is likely to be unacceptable to many businesses as well as other European countries.
The departure of Johnson and Davis will further test May’s leadership but others will view it as bid to preserve Britain’s important economic ties with Europe. In response to today’s news, the UK pound was trading this afternoon at its lowest level against the euro for the past three months. However, the possibility of a leadership challenge from Johnson or other hard liners within the Conservative party leading to a new election would appear far more damaging to Sterling.