There has been a positive market reaction to the resignation of Liz Truss after just 44 days in office, following the fierce backlash against her economic plan and humiliating climbdown.
News that the prime minister was to make a Downing Street statement sparked a rally for sterling versus the dollar – leaving the UK currency almost a cent up on the day at one stage at almost $1.13.
It remained half a cent higher following confirmation she was to leave office.
Shares also moved upwards initially on the FTSE 100 while government borrowing costs fell.
The 30-year gilt yield fell back to 3.8% – continuing its recovery since the post mini-budget highs of around 5% that sparked Bank of England intervention. As the afternoon progressed the figure rose to the 3.9% of Thursday morning.
It took a series of U-turns on the tax-cutting growth plan, demanded by new Chancellor Jeremy Hunt after the sacking of Kwasi Kwarteng, for market damage to ease.
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The reaction to the departure of Ms Truss signalled a measure of relief that the architect of the Growth Plan – outlined during her campaign for the Tory leadership – was on her way out.
Nevertheless, there was also a measure of uncertainty at play for values, given the complete lack of vision on who would replace the prime minister in Number 10.
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It will not be Mr Hunt, who has ruled himself out, leaving him free to continue preparations for the Halloween statement that is to set out the government’s new medium-term fiscal plan.
There will be some jitters over whether its direction is likely to change – or even be delayed to allow the new Tory leader to get their feet under the desk.
There has been no indication that the statement will be delayed as it is expected that the successor will be in place before 31 October.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said of the market moves: “Sterling is highly sensitive to economic policy uncertainty and even though the ship Britannia will still be left largely rudderless, with a successor still to be chosen, as far as investors are concerned, the future is marginally brighter without her in charge.
“Ten-year gilt yields eased further today, as speculation soared about her resignation, a sign of tacit approval from the bond vigilantes who punished the UK by deserting its government’s debt as worries raced up about fiscal responsibility.”
Business appealed for a more stable period ahead.
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5:57
Hunt rules out leadership challenge
Tony Danker, the director-general of the CBI, said: “The politics of recent weeks have undermined the confidence of people, businesses, markets and global investors in Britain.
“That must now come to an end if we are to avoid yet more harm to households and firms.
“Stability is key. The next prime minister will need to act to restore confidence from day one.
“They will need to deliver a credible fiscal plan for the medium term as soon as possible, and a plan for the long-term growth of our economy.”
People whose homes have been destroyed by the floods sweeping across parts of the UK over the past couple of days have been telling Sky News how they coped with the deluge.
In Lincolnshire, where a major incident has been declared, Terry, from Grantham, showed a Sky crew the aftermath of the deluge in his home, which was left under two feet of water.
“Everything’s gone,” he said, adding that he was “devastated”.
The first sign of trouble came at lunchtime on Monday, when his wife woke him and said there was water coming in [to the house], and “within a few minutes, the whole house was flooded”.
They rushed their belongings and pets upstairs, he said, as he revealed the damage to the flooded living room and kitchen, where the water mark was above a power socket.
Terry said the kitchen, where the floor was covered in sludge, smelled of mud and sewage, and their furniture and carpets were wrecked.
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They have no electricity and the food in the cupboards and freezer was “completely ruined”.
Graham Johnson, who lives in a boat with his wife and dog, in the village of Barrow upon Soar in Leicestershire, was in the pub on Monday night, before the water started to rise “rapidly”.
People living in a local caravan park were moved as a severe flood warning was issued.
Mr Johnson said he had gone out “for a couple of pints as usual and, the next thing we know, bingo”.
The couple feared their boat home was about to be swept towards the bridge.
“That’s our pride and joy, where we live, and we didn’t want to lose it,” he said, as he praised the “fantastic” emergency services, who rescued them and their dog after a nervy three-hour wait.
They were two of the 59 people rescued by firefighters in the county, where a major incident was declared and crews were called out to 160 flood-related incidents, the Fire Brigades Union (FBU) said.
Another Leicestershire resident whose home was inundated was Qasim Abdullah from Loughborough.
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0:53
Flooding across East Midlands
Pictures taken by the Associated Press show him walking through almost knee-deep water in his living room.
In nearby Quorn, businesses have shut as the main high street has flooded for the second time in as many years.
Two of the pubs in particular have been damaged.
Last year, residents had to launch a crowd fundraiser to help pay for the costs of renovation. Not to mention soaring insurance premiums.
Indy Burmi, who owns a hair salon and restaurant, hasn’t suffered flooding, but said he’s had to close up and cancel all Tuesday’s reservations, as his clients simply can’t get into the village.
And, with more rain forecast, conditions could get even worse in the short term, while residents worry that an annual battle with rising water is now the new normal.
Elsewhere in the UK, the next danger is from ice forming on untreated surfaces after rain on Tuesday evening, the Met Office has said, as it issued a new warning for northern England and Wales from 5pm until midday on Wednesday.
The Royal Liverpool University Hospital has declared a critical incident due to “exceptionally high” demand on A&E and patients being admitted to wards.
The hospital said there had been a spike in people with flu and respiratory illnesses going to emergency departments in recent weeks.
A spokesperson for the hospital said it had a “comprehensive plan in place” and was “taking all the necessary actions to manage the challenging circumstances”.
“We are working with partner organisations to ensure those that are medically fit can leave hospital safely and at the earliest opportunity,” they added.
The hospital warned some people would experience delays as it prioritises the sickest patients.
People whose case isn’t an emergency are being asked to see their GP, pharmacy or walk-in centre – or call the 111 service for advice.
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The Royal Liverpool University Hospital is in the city centre and is the biggest hospital in Merseyside and Cheshire.
Declaring a critical incident can happen when a hospital is experiencing exceptional demand, or sometimes if there is a serious problem with staffing levels.
It indicates it can’t function as normal and allows it to take extra measures to protect patients, such as prioritising the most unwell people and getting support from other agencies.
It could last hours, a few days, or weeks if necessary.
A critical incident was also declared on Friday by the NHS Cornwall and Isles of Scilly Integrated Care Board.
It said it had seen almost four times as many inpatients compared with last year and urged people with flu to avoid going to A&E.