INSTANT VIEW-UK PM Boris Johnson in crisis as top ministers quit

REACTION FROM FINANCIAL MARKETS: PHILIP SHAW, CHIEF ECONOMIST, INVESTEC "It's increasingly difficult for the prime minister to hang on. The implications for the pound and UK assets is more about the macro backdrop such as BoE and evolving inflation outlook and this shouldn't exaggerate the pressure on the downside for sterling and UK assets. DAVID OWEN, CHIEF ECONOMIST AT SALTMARSH ECONOMICS "On a three-month view this could be positive for UK assets as we could get more fiscal easing in the autumn.

Britain's finance and health ministers resigned on Tuesday in what looked to be the final blow for Prime Minister Boris Johnson's premiership after he had tried to apologise for the latest scandal to dog his administration. REACTION FROM FINANCIAL MARKETS:

PHILIP SHAW, CHIEF ECONOMIST, INVESTEC "It's increasingly difficult for the prime minister to hang on. It seems quite similar to what happened to Theresa May when Boris Johnson and David Davis resigned in fairly close proximity to one another over Brexit.

"The initial gut reaction would be... to sell the currency. However, the UK is evidently not the only economy in a precarious or fragile position. One could argue that the UK will take a less confrontational approach towards the EU negotiations which could lower the perceived threat of a trade war or trade actions." KENNETH BROUX, FX STRATEGIST AT SOCIETE GENERALE

"This brings the crisis in the cabinet to a head. This means that is difficult to for PM Johnson to hang on. "The pound and the euro has already had a bad day in the office and we could see a bit more of a reaction tomorrow. The implications for the pound and UK assets is more about the macro backdrop such as BoE and evolving inflation outlook and this shouldn't exaggerate the pressure on the downside for sterling and UK assets.

DAVID OWEN, CHIEF ECONOMIST AT SALTMARSH ECONOMICS "On a three-month view this could be positive for UK assets as we could get more fiscal easing in the autumn. It could clear the air and bring a more stable backdrop. But near term, it depends on the political backdrop."