At a time when the country is still grappling with the latest wave of Covid, and the health service is under intense pressure, the government is in chaos.
Even worse, it is a mess entirely of its own making. After all, it is hard to think of a task much simpler than enforcing lockdown rules in your own back garden. If you can’t get that right, then what can you do?
And yet, looking at the performance of British markets, you could be forgiven for thinking that nothing much was going wrong. Sterling has had a robust week. It is up by almost two cents against the dollar over the past five days, and four over the last month. It has risen just as much against the euro. The FTSE 100 was up a steady 1pc over the week, and 4.5pc over the last month, which is significantly more than the Dow Jones, the DAX and the CAC (1.6pc, 3pc and 3.6pc respectively, in case you were wondering).
Investors seem to be completely chilled about the possibility of Johnson’s departure. Indeed, some currency analysts have started to wonder if it would not be positive for the UK.
“A strong and stable leadership could set the pound on a better course, though we would have to get beyond any leadership shenanigans first,” argued Jane Foley, the head of foreign-exchange strategy at Rabobank, last week.
In truth, if Johnson does decide to spend more time with his young family, and finish his latest book, the markets are getting ready to celebrate. Here’s why.
First, his economic policies are a mess. There was the kernel of a good idea in his personal determination to level-up the regions, repair the country’s infrastructure, and use our departure from the EU to drive a renewed industrial strategy that would create jobs and improve living standards.
The boosterism that he crafted during his time as Mayor of London could certainly have helped. But it takes a lot of hard, detailed work to turn any of that into a reality, and there was not much sign of that.
Sure, the Covid crisis got in the way, but there was no excuse for not working out which industries the UK should be focusing on, or for moving faster to free ourselves from damaging EU regulations. In reality, any successor – Sunak or Truss – will be more pro-enterprise, and pro-market than Johnson.
Next, he has shown zero interest in managing the public finances. The Prime Minister’s addiction to big spending, whether it is on grandiose building projects, welfare, or the health service, has taken the public sector to a record peacetime size, with a completely predictable collapse in productivity. Only after he leaves can the public finances be put back on a sustainable path.
Finally, Johnson is so personally associated with Brexit that relations with the EU were always likely to be strained so long as he remained in office. The EU has been desperate to prove that Brexit has failed, and Johnson that it has succeeded.
Once a successor is in place, both sides of what remains an important trading relationship will be more likely to accept that our departure is in the past, isn’t going to be reversed now, and it is time to get on with normalising relations, and resolving the few issues that still have to be dealt with.