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The much anticipated resignation letter penned by the former UK Foreign Minister Boris Johnson has been released, and in as expected, he does not mince his words in unleashing a brutal attack on Thersa May, warning that “we have postponed crucial decisions — including the preparations for no deal, as I argued in my letter to you of last November — with the result that we appear to be heading for a semi-Brexit, with large parts of the economy still locked in the EU system, but with no UK control over that system.”

He then adds that while “Brexit should be about opportunity and hope” and “a chance to do things differently, to be more nimble and dynamic, and to maximise the particular advantages of the UK as an open, outward-looking global economy”, he warns that the “dream is dying, suffocated by needless self-doubt.“

He then compares May’s proposal to a submission even before it has been received by the EU, noting that “what is even more disturbing is that this is our opening bid. This is already how we see the end state for the UK — before the other side has made its counter-offer. It is as though we are sending our vanguard into battle with the white flags fluttering above them.”

And his punchline: the UK is headed for the status of a colony:

In that respect we are truly headed for the status of colony — and many will struggle to see the economic or political advantages of that particular arrangement

Explaining his decision to resing, he then says that “we must have collective responsibility. Since I cannot in all conscience champion these proposals, I have sadly concluded that I must go.”

It remains to be seen if his passionate defense of Brexit will stir enough MPs to indicate they are willing to back a vote of no confidence, and overthrow Theresa May in what would be effectively a coup, resulting in new elections and chaos for the Brexit process going forward.

Meanwhile, as Bloomberg adds, the fact that Boris Johnson, or those around him, made sure his resignation statement came out in time for the evening news – before it was formally issued in the traditional way by May’s office, hints at his continued interest in leading the Conservative Party.

His full letter is below (highlights ours):

Dear Theresa,

It is more than two years since the British people voted to leave the European Union on an unambiguous and categorical promise that if they did so they would be taking back control of their democracy.

They were told that they would be able to manage their own immigration policy, repatriate the sums of UK cash currently spent by the EU, and, above all, that they would be able to pass laws independently and in the interests of the people of this country.

Brexit should be about opportunity and hope. It should be a chance to do things differently, to be more nimble and dynamic, and to maximise the particular advantages of the UK as an open, outward-looking global economy.

That dream is dying, suffocated by needless self-doubt.

We have postponed crucial decisions — including the preparations for no deal, as I argued in my letter to you of last November — with the result that we appear to be heading for a semi-Brexit, with large parts of the economy still locked in the EU system, but with no UK control over that system.

It now seems that the opening bid of our negotiations involves accepting that we are not actually going to be able to make our own laws. Indeed we seem to have gone backwards since the last Chequers meeting in February, when I described my frustrations, as Mayor of London, in trying to protect cyclists from juggernauts. We had wanted to lower the cabin windows to improve visibility; and even though such designs were already on the market, and even though there had been a horrific spate of deaths, mainly of female cyclists, we were told that we had to wait for the EU to legislate on the matter.

So at the previous Chequers session we thrashed out an elaborate procedure for divergence from EU rules. But even that now seems to have been taken off the table, and there is in fact no easy UK right of initiative. Yet if Brexit is to mean anything, it must surely give Ministers and Parliament the chance to do things differently to protect the public. If a country cannot pass a law to save the lives of female cyclists —when that proposal is supported at every level of UK Government — then I don’t see how that country can truly be called independent.

Conversely, the British Government has spent decades arguing against this or that EU directive, on the grounds that it was too burdensome or ill-thought out. We are now in the ludicrous position of asserting that we must accept huge amounts of precisely such EU law, without changing an iota, because it is essential for our economic health — and when we no longer have any ability to influence these laws as they are made.

In that respect we are truly headed for the status of colony — and many will struggle to see the economic or political advantages of that particular arrangement.

It is also clear that by surrendering control over our rulebook for goods and agrifoods (and much else besides) we will make it much more difficult to do free trade deals. And then there is the further impediment of having to argue for an impractical and undeliverable customs arrangement unlike any other in existence.

What is even more disturbing is that this is our opening bid. This is already how we see the end state for the UK — before the other side has made its counter-offer. It is as though we are sending our vanguard into battle with the white flags fluttering above them. Indeed, I was concerned, looking at Friday’s document, that there might be further concessions on immigration, or that we might end up effectively paying for access to the single market.

On Friday I acknowledged that my side of the argument were too few to prevail, and congratulated you on at least reaching a Cabinet decision on the way forward. As I said then, the Government now has a song to sing. The trouble is that I have practised the words over the weekend and find that they stick in the throat.

We must have collective responsibility. Since I cannot in all conscience champion these proposals, I have sadly concluded that I must go.

I am proud to have served as Foreign Secretary in your Government. As I step down, I would like first to thank the patient officers of the Metropolitan Police who have looked after me and my family, at times in demanding circumstances.
I am proud too of the extraordinary men and women of our diplomatic service. Over the last few months they have shown how many friends this country has around the world, as 28 governments expelled Russian spies in an unprecedented protest at the attempted assassination of the Skripals. They have organised a highly successful Commonwealth summit and secured record international support for this Government’s campaign for 12 years of quality education for every girl, and much more besides. As I leave office, the FCO now has the largest and by far the most effective diplomatic network of any country in Europe — a continent which we will never leave.

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Once again, with the swipe of a few digits, President Trump has knocked a few billion in market cap of stocks as he tweeted that Pfizer and others “should be ashamed that they have raised drug prices for no reason,” criticizing the company for offering cheaper prices abroad than in the U.S. and pledging that “we will respond.”

Pfizer & others should be ashamed that they have raised drug prices for no reason. They are merely taking advantage of the poor & others unable to defend themselves, while at the same time giving bargain basement prices to other countries in Europe & elsewhere. We will respond!

— Donald J. Trump (@realDonaldTrump) July 9, 2018

The response was swift – PFE erasing the day’s gains and weighing on The Dow…

As Bloomberg reports, Trump has promised repeatedly to drive down drug prices, to little effect so far. Earlier this month, the Financial Times reported that Pfizer had raised prices on about 100 drugs, following a pattern of regular increases that the company takes each year.

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Yesterday we showed that Friday’s trade war is already starting to impact prices of US goods sold in China, with Tesla announcing prices hikes on its Model S and X of roughly 20% across the board as a result of new tariffs imposed on imported cars by Beijing.

Today, in a similar move but in the opposite direction, US petrochemical giant Sunoco announced that will raise prices on all composite cans and metal ends in the U.S. and Canada by 4%, in response to recent tariff announcements, with the price increases effective Aug. 1.

“Sonoco’s global sourcing power and commitment to supply security have allowed us to effectively mitigate historic inflationary pressures,” said Robin Gordon, division vice president of sales for Sonoco’s U.S. and Canada composite cans and metal ends.

“However, the recent trade announcements assigning tariffs on the steel and aluminum supply, along with strong regional demand, have placed unprecedented stress on our suppliers’ feedstocks and corresponding input costs. While we will continue to monitor the domestic and global sourcing landscape to find ways to mitigate inflation, we do need to recover our current cost exposure. We will continue to work with our suppliers to ensure supply security and find ways to bring input costs down over the coming months.”

The action is in response to Trump’s 25% tariff on steel imports and 10% tariff on aluminum imports from Canada, Mexico and the European Union.

And since downstream customers will pass on these higher costs to end consumers, it is only a matter of time before these higher costs, not just from Sunoco but all its peers, show up in inflation. Yet what is odd, is that in a note released today, Goldman continues to press the case that trade war will have a negligible effect on economic growth and inflation:

We continue to believe the effects of the tariffs imposed to date should be small. We expect that these should lower the level of GDP by only 1-2bps, and increase core PCE inflation by about 4bps (yoy) once they are phased in.

For those asking, 4bps is 0.04%, or basically noise, and yet judging by Sunoco’s price increase which is 100x higher, if on a limited set of products, this may be yet another forecast where Goldman is wrong.

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Last week, JPMorgan spooked investors when looking at recent moves in Chinese markets, it concluded that “2018 Is Looking Increasingly Like 2015.” Now, in a note seeking to address this issue (and to ease investor concerns) Goldman analyzes the similarities and differences between 2015 and 2018 to see if JPM is right, and if indeed the “ghost of 2015” is back.

Goldman’s note comes just days after a separate Goldman analysis in which the bank wrote that “the past week we met with investors in Guangzhou and Shenzhen, and the tone remains very negative” for one reason: most investors suddenly feel as if they have lost the backstop of the central bank, which until recently would never allow corporate bankruptcies, and suddenly – as part of the country’s deleveraging campaign – is eager to take air out of the system, while at the same tine draining liquidity out of the system resulting in financial conditions approaching the tightest on record.

Fast forward to today, when going straight to the punchline, and perhaps not surprisingly considering the bank’s still bullish outlook on China, Goldman has a relatively upbeat outlook, yet while it finds that many of the Chinese economy’s indicators are more solid now than they were 3 years ago, the risk is from the outside, as “external headwinds seem more challenging now, characterized by strained Sino-US (trade) relations and the resulting Rmb volatility, solid but moderating global growth, a tightening Fed, and EM assets weakness.“

To be sure, the key reason for the comparisons between 2015 and 2018 is obvious: since its ytd high on Jan 24, China A shares (proxied by CSI300) have fallen 23% as of the close on July 6.

As Goldman calculates, this is the sixth 20%+ Chinese market correction (the benchmark for a ‘Major’ correction) over the past decade since the financial crisis, “prompting considerable investor concern that a market correction akin to the 2015 meltdown – when China A shares lost 47% from June 2015 to Jan 2016 – is just around the corner.” 

In its analysis, Goldman looks for similarities and differences between now and 2015 by comparing +40 macro/market variables and risk proxies to better frame views on China’s A-share market. These are all shown below:

Here is how Goldman frames the key variances, starting with the macro and market growth backdrops which the banks says are healthier now than before; other favorable factors are:

• starting price levels, equity valuations, and risk appetite look significantly less extended in the current episode;
• financial leverage and liquidation risk relating to retail margin financing, WMP, stock-pledged loans, and other leverage products, appear more subdued and manageable this time around.

So far so good, however to Goldman the greater risk now compared to 2015 is that external headwinds seem more challenging now, characterized by strained Sino-US (trade) relations and the resulting Rmb volatility, solid but moderating global growth, a tightening Fed, and EM assets weakness.

Some further details, first on the macroeconomic context:

In 1H15, the Chinese economy was still suffering from deflation (average of CPI and PPI: -1.7% yoy) stemming from overcapacity issues domestically and lackluster global demand, as measured by our China and Global Current Activity Indicators (CAI). As a result, corporate earnings were lackluster, with NBS industrial profits and aggregate earnings of the listed universe growing merely 0.7% and 10%, respectively, in the first half of the year.

But in the current episode, we view the fundamental picture a lot more promising: Our China CAI has been growing on average 7.0% yoy in the first 5 months of the year, NBS industrial profits were up 17% yoy during the same period, and “New China” industries are still delivering impressive growth so far this year on our proprietary measure. In the equity market, corporate earnings were solid in 1Q, expanding 15% yoy. Forward-looking indicators also remain encouraging, with consensus earnings being revised up 0.4% since end-March and our top-down earnings model, which takes into account PMI and inflation proxies, pointing towards a strong 2Q.

Growth aside, the macro/policy environments also differ in the following aspects:

• Credit growth was markedly stronger in 2015 as the authorities were embarking on a major credit easing cycle to combat deflation and support growth (particularly after the market boom/bust) while in more recent times “deleveraging” and “controlling financial risk” are the key policy objectives that have been heavily emphasized by policymakers since the 19th Party Congress in October last year. The policy commitment is somewhat reflected in the downtrend in M2, the shadow banking component in TSF, and our economists’ total money growth proxy since the beginning of the year;
• Monetary conditions were generally more accommodative in 1H15 based on our China Financial Condition Index (GS China FCI). In particular, price of money was easier back then (lower 7-day repo and swap rates), suggesting room for monetary policy easing in the current episode if growth comes under threat

How about in asset markets? Here too Goldman sees far less risk in the current regime:

• Different starting points: China A shares had an impressive run from 2H14 to 1H15, rallying 65% and 151% 6m and 12m before the peak in June 2015. At its peak, China A shares had total market cap of US$11tn (US$308bn ADVT for June 2015), representing 107% of 2014 GDP, and 41% of US market cap at the time. From Jan 2017 to Jan 2018, while China A shares delivered 26% returns, it was underperforming its DM and EM peers.
• Equity valuations look more supportive now. Headline index P/E peaked at 17x in June 2015, but at only 14x in Jan 2018 (now at 10.5x), with the average/median PEs showing even larger gaps (median PE at 15x now vs 32x in 2015). The PEG ratios tell a similar narrative, hovering at 1.0x now vs. 1.3x then, suggesting corporate earnings growth is generally more attractively priced than 3 years ago.
• Our equity risk barometer (ERB) for China A, which we view as a comprehensive sentiment indicator, which encompasses 16 discrete variables such as turnover velocity, market volatility, and cross-asset correlations, suggests that risk appetite wasn’t even at extreme levels at the onset of the drawdown (ie, it was in neutral territory in early Jan) but is currently at very depressed levels not seen since the GFC meltdown a decade ago.

Next, Goldman looks at another topic that has gained prominence in recent weeks: the threat of market leverage and forced liquidation risks. Here too, Goldman finds mostly favorable signs, focusing initially on the leverage profile of A shares, as it was the key culprit for the 2015 market dislocation.

• Overall, we’d argue that the current systemwide leverage ratio (1:0.15) is substantially lower than the peak in 2015 (1:0.5), although market risk may have shifted towards redemption this time around, from margin-unwinding back in 2015, due to the crackdown on the shadow banking credits. Official margin loan balance has more than halved from the peak in June 2015 (Rmb2.3tn) to Rmb0.9tn now. Margin financing balance accounted for 3.5% of listed market cap in June 2015, but is only at 1.6% at present. Importantly, the effective leverage offered by this channel has been quite measured (and tightly regulated), at around 1 to 0.7 (i.e. $70 of loans on $100 of capital), with still-healthy guarantee ratios of around 240% as of June. We estimate that equity prices would need to fall another 26% from current levels to trigger margin call for the average margin financing positions.
  
• Brokers’ margin financing aside, investors are concerned about other leveraged exposures which are not captured in the brokers channel, notably leveraged funds and wealth management products (WMP). Aggregating our bottom-up and our banks team’s estimates, we see these vehicles combining to Rmb2.8tn worth of equity holdings, representing 5% of listed A-share market cap. However, our understanding is that, unlike those investing in the bond market, most of the equity-oriented WMPs are unlevered and hence they are more likely subject to redemption risk than margin call risk.
• Stock pledged loans (SPL) have been one of the key topical concerns among investors in the context of forced selling in A shares. In sum, we see limited liquidation (and systemic) risk in this area, because: (1) the outstanding value of pledged shares and loans is Rmb5.0tn and Rmb2.0tn respectively, 10% and 4% of A-share listed market cap; (2) Loan-to-value (LTV) ratios are generally fairly conservative for SPL (37% on average over the past 3 years); (3) We estimate that only 31% of the outstanding pledged shares/loans are facing margin call risk, representing 3%/1% of market cap; (4) it would require another 20% fall in equity prices to push the margin call risk to 50% of total; and (5) According to Bloomberg, window guidance from regulatory bodies has been issued to brokers to reduce the risk of unordered liquidation, even when a margin call is triggered.
• Other OTC leverage products: “Hidden” OTC leverage was perhaps the reason why the correction in 2015 was manifested in such a fast and furious fashion. These OTC products were not tightly regulated and some of them were able to offer as high as 10X leverage to investors (e.g. P2P financing), thereby amplifying the up and down moves of the 2015 boom/bust cycle. At their peak, these products in aggregate could add another Rmb1tn-Rmb1.5tn levered exposure on top of brokers’ margin financing. At the moment, highly-levered OTC products still exist (e.g. P2P financing and online financing platforms) but their scale is likely to be a fraction of that in 2015, based on our channel checks.

And visually:

Summarizing the above observations, Goldman notes a common theme: the domestic dynamics look to be in better shape now than in the last boom/bust episode, with the exception of the determination by policymakers to restrain shadow banking credits which has provoked redemption pressures for certain WMPs with low (or no) leverage.

And yet, one risk remains: namely the external situation, which is arguably more challenging for China this time around, “featuring continued and possibly escalating US-China trade tensions, moderating global growth momentum (which tends to bode well for the Dollar), normalizing US monetary policy, and weak EM assets performance.” Which predictably brings us to the following hedge in the context of Goldman’s broader “buy” rating on Chinese stocks:

As such, while we maintain our positive (Overweight) stance on Chinese stocks, we would take a selective implementation approach to better navigate the near-term volatility.

Goldman’s conclusion: “investors will remain jittery over China stocks until there is greater clarity about resolution to ongoing heightened trade tension, and/or more pronounced policy responses in terms of policy loosening, FX stabilization, and perhaps less likely, marginal relaxation of financial regulation tightening.”

What Goldman did not say, at least not explicitly, is that while the domestic situation now may be better, the risk for the Chinese stock market – and economy – is that Trump continues to aggravate China’s external financial links, supply-chains and trade ties with ever escalating protectionist salvos. Which may be the reason behind Trump’s trade war in the first place, and why contrary to China’s denials, Trump holds the leverage over Beijing, as a few more pushes and Chinese stocks may suffer from a waterfall liquidation, because no matter how strong the domestic profile, there is only so much pain China can sustain from the US.

And with the Shanghai Composite sliding the under 100 points from the post 2015 lows, it may not take much more pressure to force this key backbone of China’s wealth effect to finally snap, potentially leading to a shockwave across China’s other asset classes and, ultimately, a sharp enough economic slowdown that forces Beijing to yield.

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Documents released Friday by the Department of Justice confirm that a DOJ attorney known as Robert Mueller’s “pit bull” arranged an April 11, 2017 meeting with journalists to discuss their investigation into Paul Manafort in which information may have been leaked back and forth concerning the case.

At question is the FBI’s relationship with AP – and whether or not the FBI leaked information about the Manafort case to them or vice-versa.

According to memos written by FBI agents, Special Counsel attorney Andrew Weissmann, Mueller’s #2 (who donated $6,600 to the DNC, Obama and Clinton campaigns and reportedly attended a Clinton election night party in NYC), arranged a meeting between DOJ/FBI officials and four reporters from the Associated Press – who told the FBI about a storage locker owned by Manafort and then gave the FBI a passcode to access it. 

The memos also show that one of the AP journalists gave the FBI an unusual detail about a storage unit in Alexandria, Virginia that Manafort used to keep records of his worldwide business dealings. Both memos say the AP revealed a code number to access the unit, although one memo says the reporters declined to share the unit number of the locker or its street address. –Politico

Manafort’s attorneys received the documents on June 29 and revealed them in a Virginia federal court filing as part of a push for a hearing into possible leaks of sealed grand jury information, false reports and potentially classified materials. 

“The meeting raises serious concerns about whether a violation of grand jury secrecy occurred,” wrote Manafort attorney Kevin Downing in a motion requesting the hearing. “Based on the FBI’s own notes of the meeting, it is beyond question that a hearing is warranted.”

One of the memos written by FBI Supervisory Special Agent Karen Greenaway reveals “The meeting was arranged by Andrew Weissmann,” who goes on to note that Weissmann provided guidance to the reporters. 

According to Greenaway, Weissmann suggested that the reporters ask the Cypriot Anti-Money Laundering Authority, a Cypriot government agency, if it had provided the Department of Treasury with all of the documents they were legally authorized to provide regarding Manafort. –Daily Caller

AP director of media relations Lauren Easton defended the FBI briefing in a statement toi the Daily Caller News Foundation: 

“Associated Press journalists met with representatives from the Department of Justice in an effort to get information on stories they were reporting, as reporters do. During the course of the meeting, they asked DOJ representatives about a storage locker belonging to Paul Manafort, without sharing its name or location.”

Originally reported by journalist Sara Carter in January, the meeting between AP and DOJ officials was confirmed for the first time on June 29 in a pre-trial hearing at which FBI special agent Jeffrey Pfeiffer admitted that the FBI may have conducted a May 2017 raid on a storage locker rented by Manafort. 

The AP journalists, Chad Day, Ted Bridis, Jack Gillum and Eric Tucker, were conducting an extensive investigation of Manafort, including payments he received through various shell companies set up in Cyprus.

Day and Gillum published an article a day after the meeting laying out some of the allegations against Manafort, including that he was listed in a “black ledger” that documented illicit payments from a Ukrainian political party allied with the Russian government. –Daily Caller

Manafort will go on trial July 25 for a litany of bank fraud and money laundering charges connected to a 2012-2014 lobbying effort for a pro-Ukraine think tank tied to former president Viktor Yanukovych. Yanukovych fled from Ukraine to Russia after he was unseated in a 2014 coup. 

Manafort’s firm earned $17 million consulting for Yanukovych’s centrist, pro-Russia ‘Party of Regions.’ During the same period, he oversaw a lobbying campaign for the pro-Russia “Centre for a Modern Ukraine,” (ECMU) a Brussels based think tank linked to Yanukovych which was pushing for Ukraine’s entry into the European Union.

Of note, the now defunct Podesta group, operating under Manafort, earned over $1.2 million as part of that effort.

While the Podesta group and Paul Manafort both failed to file paperwork related to the Pro-Russia Centre for a Modern Ukraine, retroactive disclosures filed by the Podesta group on August 17 revealed dozens of previously unreported communications with high level democrat officials related to the lobbying campaign – including Hillary Clinton’s State Department and the office of former Vice President Joe Biden.

Read the motion by Manafort’s attorneys here: 

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With President Trump preparing to announce his Supreme Court pick tonight at 9 pm, it appears restive social conservatives are making some headway in their last-minute push to dissuade the president from going with the purported frontrunner, US circuit judge Brett Kavanaugh. However, as Axios pointed out, the push to nominate a deeply conservative justice could be scuttled by moderate Republican senators, who could easily sink a nomination that they don’t support.

As Axios explains, “Republicans have a narrower margin for error than they did when the Senate confirmed Trump’s first Supreme Court nominee, Neil Gorsuch by a vote of 54-45 in April 207.”

Thanks to Doug Jones, the Democrat who defeated Roy Moore to win Attorney General Jeff Sessions’ former Senate seat late last year, Trump will likely need the unanimous support of the entire Republican caucus if Sen. John McCain, who has been away from Washington since December as he battles brain cancer, doesn’t show up to vote.

Assuming McCain misses the vote (which is widely expected) Republicans will be left with a 50-49 margin (factoring in the fact that two independents in the Senate typically caucus with the Democrats). That means either Susan Collins of Maine or Lisa Murkowski of Alaska could end up being the swing vote. Both have hinted that they might balk at a nominee who would vote to overturn Roe. v. Wade.

According to the Wall Street Journal, several of the president’s key confidants – including Fox host Sean Hannity – are pushing for Amy Coney Barrett, who clerked for deceased Justice Antonin Scalia, or Thomas Hardiman. Several people close to Trump said the final decision could be made just hours before the 9 pm ET announcement. “It’s a jump ball,” one anonymous official told WSJ.

Doubts that Kavanaugh will be Trump’s pick are beginning to fester, even among the “smart money”. While he has maintained his frontrunner status on online betting markets like PredictIt, the odds have moved lower.

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They’re dropping like flies…

You will find more infographics at Statista

Following the resignations of Foreign Secretary Boris Johnson and Brexit Secretary David Davis within hours of one another (as well a number of junior ministers), UK Prime Minister Theresa May has been left exposed as the head of an increasingly divided Conservative Party.

Below, Reuters’ Andrew MacAskill  explains how May could be removed from office if she has to face a leadership challenge:

What needs to happen for there to be a leadership contest?

A leadership challenge can be triggered if 15 percent of members of parliament in May’s Conservative Party write a letter to the chairman of the party’s so-called “1922 committee”.

The Conservatives currently have 316 members of parliament (MPs) so 48 of them would need to write such letters to challenge May.

Once that threshold has been reached, the chairman will announce the start of the contest and invite nominations.

Could this happen to May?

The chairman of the 1922 committee is the only person who will know exactly how many members of parliament have submitted letters of no confidence.

But some eurosceptic members of parliament have started submitting letters to the committee chairman in protest over her Brexit negotiating strategy.

What will happen during a no confidence vote?

If a no confidence vote is called then all serving Conservative members of parliament will be able to cast a vote for or against the serving leader.

If May wins any confidence vote she remains in office. If she loses, she is obliged to resign and barred from standing in the leadership election that follows.

How quickly can a no confidence vote take place?

In the last no confidence vote against a sitting Conservative leader in 2003, the chairman of the 1922 committee announced he had received enough letters to trigger a vote on Oct. 28 and the vote was held the next day.

What would happen if May lost the no confidence vote?

If May lost a no confidence vote then there would be a leadership contest.

If several names are put forward to lead the party, then a vote is held among Conservative MPs using the first past the post system to whittle down the field with the candidate with the fewest votes removed. Another ballot among Conservative lawmakers is then held until two candidates remain.

The final two nominees are then put to a ballot of the wider Conservative Party membership with the winner named the new leader.

Following David Cameron’s decision to step down as prime minister and Conservative leader after the EU referendum in 2016, five candidates put their names forward.

The field was narrowed to May and then junior minister Andrea Leadsom but she pulled out of the race before members voted, leaving May to become leader unopposed.

*  *  *

Finally, we note that, as a recent YouGov poll shows, even before this weekend’s events, the majority of the public felt Brexit was ‘going badly’. 

You will find more infographics at Statista

Taking the most blame for this, as our chart shows, is indeed the government with 68 percent of respondents pointing their fingers in this direction. The second most popular target is the EU, but the team on the other side of the negotiating table only attracted 37 percent of the shared blame.

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