The removal of special advisor Dominic Cummings and the bubbling cauldron of tensions in Number 10 could show us a lot about Brexit. Number 10 does have a back door that photographers and journalists are banned from. Probably more than one in reality. So when Cummings was forced to walk out the big black door of Number Ten, tail between his legs and box in hands, we can be fairly sure the Prime Minister was sending a message. So what does making the master mind of the vote leave campaign and someone the media liked to portray as the government’s master puppeteer mean for the Pound?
Two things. Firstly, in the short run, Cummings’ very public dismissal presents a risk to the Prime Minister, his government and therefore the Pound. Before his appointment as special adviser Cummings kept a very public diary. His blog was his place to air his political ideas on everything from polling and forecasting to musings on the European Union. That same blog has remained stagnant and unpopulated since January this year and sparsely used during his period as adviser. With the broader stability of number 10 in question, it seems possible that Cummings could reopen his diary to scold Johnson. Some say he has even travelled to Barnard Castle to set up a lair in which to plot and mastermind the demise of his former advisee.. (Others don’t). Any reaction that harms political stability and the PM could undermine Sterling demand and thus its value.
With decades of surviving sticky situations both professionally and personally, any short run risk to Johnson can likely be discounted and spun as an embarrassed aid seeking revenge. What then might this change show us about the course of Brexit? Cummings’ dismissal followed a resignation by Lee Cain. If two events can be considered a theme then the evolution of Number 10’s staff is nodding towards a cognitive tilt on Brexit that might pave way to the removal of some red lines blocking the path to a Brexit deal. With the final week of intensified negotiations underway and an EU summit taking place virtually on Thursday and Friday, it appears the stars might be aligning for 28 signatures on a Brexit deal. With Sterling biding it’s time for more concrete progress there is still a considerable discount in the Pound that could unwind if a deal is passed.
Discussion and Analysis by Charles Porter