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Top Tory Donor Backs Boris Johnson to Be Next U.K. Prime Minister

Top Tory Donor Backs Boris Johnson to Be Next U.K. Prime Minister

(Bloomberg) --

Boris Johnson received a boost to his bid to become Britain’s next prime minister after a leading Conservative donor promised to give funds to his campaign.

Peter Cruddas, founder and CEO of U.K.-based derivatives dealer CMC Markets Plc and a long-standing Brexit supporter, said he believed Johnson would be the right leader to complete the divorce from the European Union. He didn’t rule out supporting other pro-Brexit candidates, too.

“I’m going to give him some money and back him,” Cruddas, 65, said in an interview. “I think we need a Brexiteer as our next prime minister. The country voted to leave the European Union and I think we should have someone that delivered that, and it should be someone like Boris Johnson.”

Johnson is the current favorite in the race to succeed Theresa May as Conservative leader and British premier. He has said the party faces “extinction” if it doesn’t deliver Brexit by the Oct. 31 deadline, and that he’d be willing to leave the EU without a deal if necessary.

The government must now deliver on the 2016 vote for Brexit, said Cruddas, who is well-versed in Tory politics having previously served as the party’s treasurer.

“Whether you agree or disagree with exiting the European Union, we have to implement the result of the referendum,” Cruddas said. “Once that’s been implemented, then we can have another look at it. But you have to implement the result of the referendum and it has to be implemented by a Brexiteer, as far as I’m concerned.”

While Cruddas is backing Johnson, he’s not planning to take an active role in the former foreign secretary’s campaign. “I’m not going to go out campaigning. I’m too old for that now.”

Currency trade

Cruddas’s company has felt some effects of Brexit, although the extent of the damage is debatable, even within the firm. Net operating income for the year through March fell by about one-third while pretax profit plunged almost 90% to 6.3 million pounds, CMC said on Thursday.

Some of the decline was caused by a regulatory crackdown on CMC’s main product: contracts for difference, complex derivatives largely banned in the U.S. that retail investors use for bets on foreign exchange, stocks, bonds and even cryptocurrencies. A near-record decline in volatility in currency markets also dented performance at Cruddas’s firm, whose shares have lost more than half their value in the past 12 months.

Top Tory Donor Backs Boris Johnson to Be Next U.K. Prime Minister

In the same interview, CMC’s commercial director, David Fineberg, blamed “this whole Brexit overhang” for some of the rout. “But is that Brexit overhang? I don’t know,” responded Cruddas.

Fineberg said uncertainty over Brexit has a particular impact on what currency traders call cable, or the exchange rate between the U.K. pound and the U.S. dollar, and has “definitely been an overhang.”

“I’m not sure that’s entirely the reason,” said Cruddas.

Brexit is likely to be a factor for low trading volumes in cable, according to Greg Anderson, New York-based global head of FX strategy at the Bank of Montreal. The impasse is likely to spook “speculators” and keep them out of the market, he said.

“The speculators just don’t touch it,” said Anderson. “Low volume, specifically in the cable, you could maybe blame on Brexit.”

To contact the reporters on this story: Donal Griffin in London at dgriffin10@bloomberg.net;Tim Ross in London at tross54@bloomberg.net

To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Marion Dakers, Keith Campbell

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