The financial markets have enjoyed a rebound as Boris Johnson dropped out of the leadership race, leaving Rishi Sunak as the favourite to become prime minister.
On Monday morning, the FTSE 100 started the day with a 0.5% rise, pushing it above the 7,000-point mark for the first time in a week.
And the pound rallied higher at $1.13.
The value was higher than at most points over the last 10 days and follows the announcement that former prime minister Mr Johnson has exited the Tory leadership race.
There is also an expectation that a future rise in interest rates will be lower than previously forecast.
With the expectation that former chancellor Mr Sunak will become the next prime minister, the market reacted with the expectation he could fix the UK finances which have taken a hit over the past month when the pound reached an all-time low with the dollar and the Bank of England had to intervene to prevent a collapse in the pensions industry.
The rebound has come from a low on Friday afternoon where the pound was trading at $1.11, coinciding with the news Mr Johnson was seeking to once again be head of the Conservative Party.
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Friday morning had brought other bad financial news for the UK.
Moody’s rating agency was the latest to weigh in on the UK’s financial outlook. It wascut down from “stable” to “negative”due to policy uncertainty amid high inflation and weaker growth prospects.
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Moody’s said the government’s “ability to engender confidence in its commitment to fiscal prudence” will be a consideration for Moody’s in “resolving the negative outlook”.
There were also concerns that the promised financial statement on 31 October, due to be delivered by Chancellor Jeremy Hunt, would be delayed by a new prime minister.
Similarly the pound fell against the euro shortly after midday on Friday to €1.13. This also rose on Monday morning to €1.15.
But today has been a positive morning for the UK finances across the board.
Markets are now expecting the Bank of Englandto set interest rates at slightly less than 5%, lower than the 6% expected in the weeks following the mini-budget.
That lower expected rate is likely to mean cheaper mortgage repayments for homeowners.
The cost of government borrowing also declined on Monday morning. The interest rate repayments the government has to pay on the money it borrowed on the market fell from 4.1% to 3.8% in its 10-year benchmark bonds, effectively state IOUs.
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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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.