Pound falls after Cabinet cull

??The pound ?lost value on Thursday morning as the market took in the sweeping changes to Cabinet announced by new Prime Minister Boris Johnson.
Prime Minister Boris JohnsonPrime Minister Boris Johnson
Prime Minister Boris Johnson

​The pound ​fell to 1.2479 dollars​, down from​ 1.2496 dollars at the previous close.

Fiona Cincotta, senior market analyst at City Index, said the currency could still fluctuate as the new leader makes his first moves.

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"Speculation is rife that Johnson will show the door to the remaining ministers who are pro-remain and replace them with stronger Brexiteers," she said.

"The pound will take its next cue from his first decisions in office."

​Mr Johnson will preside over his first meeting of his new Cabinet after a brutal cull of Theresa May's top team.

Within hours of taking office, the new Prime Minister moved to stamp his authority, putting Brexiteers into key Cabinet posts as he vowed to take Britain out of the EU by the October 31 deadline.

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In the most eye-catching appointment of a dramatic day, arch-Brexiteer Jacob Rees-Mogg - who proved such a thorn in the side of Mrs May - entered the Government as Leader of the Commons.

Following his appointment, Mr Rees-Mogg, who led the pro-Brexit Tory European Research Group (ERG), denied there had been a "Leave" takeover at the top of the new administration.

"Boris is bringing the country together, the party together, through his Cabinet appointments. It is not a Leave takeover Cabinet by any means," he told Sky News.

However he issued a sharp warning to disgruntled former ministers plotting to thwart Mr Johnson's Brexit plans that it was hard to see how they could succeed.

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"The Withdrawal Act means that the default position is that we leave on October 31. That would have to be changed to stop the law taking its course," he said.

"Parliament would have to change the law and it is hard to see how that will happen."

But with more than half of Mrs May's Cabinet having quit or been sacked, he is well aware that he could face a difficult time at Westminster.

It prompted speculation that he could hold a snap ​G​eneral ​E​lection after MPs return in September - once they have finished their summer break which starts on Friday - to try to break the deadlock.

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The most high profile casualty of Mr Johnson's cull was his defeated leadership rival Jeremy Hunt, after he refused to accept a demotion from the Foreign Office.

Others to be sacked included Penny Mordaunt and Liam Fox, both prominent backers of Mr Hunt, who lost their jobs despite their record as committed Brexiteers.

In contrast, Dominic Raab, who quit the Cabinet over Mrs May's Brexit deal, returned as Foreign Secretary and First Secretary of State, making him Mr Johnson's de facto deputy.

Priti Patel, another ardent Brexiteer and Thatcherite who has previously advocated the return of capital punishment, was made Home Secretary.

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Michael Gove - who spearheaded the Vote Leave campaign in the 2016 referendum with Mr Johnson but then scuppered his subsequent leadership bid - became Chancellor of the Duchy of Lancaster in the Cabinet Office.

Stephen Barclay, another prominent Brexiteer, retains the key post of Brexit Secretary.

In another potentially controversial move, Mr Johnson brought in the abrasive Vote Leave mastermind Dominic Cummings in an advisory role.

Alastair Campbell, who was head of communications at No 10 under Tony Blair, believes Mr Johnson's appointment will "not end well".