London share prices were higher this morning but the pound was lower on the final day of voting for a new leader of the ruling Conservative Party.
The ballot closes tonight and the winner will be announced tomorrow in an outcome that will be critical for the Brexit process.
Favourite to win is ex-London mayor Boris Johnson, who has said the UK will leave the European Union on 31 October regardless of whether a new deal has been struck.
Crisis in the Gulf
His opponent, the Foreign Secretary Jeremy Hunt, is thought likely to seek an extension from Brussels to allow more time for negotiation.
This morning, the blue-chip FTSE 100 Index was up 0.5% at 7,546.29, while the FTSE 250, which is more focused on domestic UK firms than is the international FTSE 100, was 0.16% higher at 19,653.28.
The pound was down also against the dollar, losing 0.3% to stand at $1.2466.
The new prime minister will take office on Wednesday after the incumbent, Theresa May, completes her final weekly question time in the House of Commons.
But in a reminder that events do not form an orderly queue, Mrs May is today chairing a meeting of the Government’s emergency committee to respond to the seizure, of the British-flagged oil tanker, the Stena Imperio, in the Persian Gulf by Iranian troops.
Reports suggest ministers are considering freezing Iranian assets held in London in retaliation.
The other leadership election
Meanwhile, in Westminster, one of Mr Hunt’s aides, the Foreign Office minister Sir Alan Duncan, has resigned, saying he expects Mr Johnson to win and is standing down in protest.
Philip Hammond, the Chancellor, has said he will quit if Mr Johnson wins.
Justice Secretary David Gauke also intends to reign in the event of a Johnson victory.
With talk of the UK political scene realigning itself into a four-party system, the Lib Dem leadership race is of more than usual interest to Westminster watchers. Broadly speaking, the Lib Dems and much of the Labour Party are opposed to Brexit and want a re-run of the 2016 referendum, while most of the Conservative Party and all of Nigel Farage’s new Brexit Party want to press ahead with British withdrawal.
The expected Boris Johnson victory could tip the UK into a constitutional crisis, given most MPs are opposed to leaving the EU without an agreed deal, while Mr Johnson has said this is his fall-back position.