LONDON: Stock markets recovered further Thursday as investors weighed recession risks, while the pound rallied as Britain’s scandal-hit Prime Minister Boris Johnson prepared to quit as leader of the Conservative party.

Elsewhere, oil prices climbed and the euro remained around 20-year lows versus the US dollar.

“Stocks bounce as pressure points ease,” noted independent markets analyst Stephen Innes.

The Federal Reserve on Wednesday (6th of July, 2022) stressed its readiness to continue hiking US interest rates to tackle soaring inflation.

Minutes of their last meeting made clear that officials did not plan to let up in efforts this year to try and cool prices.

Inflation stands at the highest levels since the early 1980s both in the United States and Britain, where attention Thursday was firmly on political upheaval gripping the nation.

The pound rallied against the dollar and euro, with Johnson set to resign later in the day as Conservative party leader, according to local media – paving the way for a successor to replace him as prime minister.

Dozens of ministers have quit his scandal-hit government since Tuesday, including former finance chief Rishi Sunak.

“The pound is pushing higher, hitting session highs inching closer back up to… $1.20, a critical support level it broke below this week amid the political and economic uncertainty,” said Victoria Scholar, head of investment at Interactive Investor.

“The currency market is relieved that Johnson is finally resigning, removing some of the political uncertainty that was priced into the pound and paving the way for a new prime minister,” Victoria Schola added.

The euro meanwhile remained under $1.02 – a level it slumped under this week on its way to hitting a 20-year low.

The European single currency is being hammered by growing fears of a recession for the eurozone and the likelihood of more aggressive US interest-rate hikes.

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