UK Conservative Party Starts Choosing Leader

     LONDON (AP) — The race to succeed Conservative Prime Minister David Cameron intensified Tuesday as Britain grappled with growing signs of economic strain resulting from the country’s vote to leave the European Union.
     With the British currency plunging to its lowest point in three decades, the Conservative Party is holding its first round of voting Tuesday to whittle down the field hoping to replace Cameron, who announced his intention to resign after losing the vote on EU membership.
     Former London Mayor Boris Johnson, his leadership hopes dashed last week, threw his support behind one of the least-known Conservative Party leadership contenders — Energy Minister Andrea Leadsom — before the voting began.
     Tuesday’s vote will eliminate one of the five contenders, but it will also measure the relative strength of the survivors, including the presumed front-runner, Home Secretary Theresa May.
     Johnson, one of the most prominent figures in the ‘leave’ campaign to get out of the EU, said Leadsom, 53, has the “zap, drive and determination” to lead the country. Johnson decided not to run when his former ally, Justice Secretary Michael Gove, withheld his support for Johnson and decided to try to become prime minister himself.
     A sprawling fight for power has upended the predictability of British politics since the June 23 referendum. Three major political figures — Cameron and Johnson of the Conservatives and U.K. Independence Party leader Nigel Farage — have stepped aside rather than weather the upcoming divorce negotiations with the remaining 27 nations in the bloc.
     The ramifications of leaving the EU’s single market of 500 million are roiling financial markets. The British pound was down sharply Tuesday, as were shares in U.K. real estate companies, amid concerns that the exit from the EU will hurt property prices in Britain.
     The pound was down 0.9 percent to $1.3166, its lowest since the vote and the weakest in 31 years.
     Amid the upheaval, Bank of England Gov. Mark Carney projected a sense of calm Tuesday as he relaxed capital requirements for banks to free up money for loans for homes and businesses.
     “The bank can be expected to take whatever action is needed to promote monetary and financial stability, and as a consequence, support the real economy,” Carney said. “These efforts mean we can all look ahead, not over our shoulders.”
     The Bank of England has cited commercial real estate as one of the risks to the British economy. The sector had taken in capital from overseas and had become “stretched,” the bank said.
     Financial groups Aviva Investors, Standard Life and M&G Investments stopped trading Tuesday in commercial property funds following a rapid increase in investors trying to liquidate their holdings. Both said they stopped trading to protect other investors who wished to remain in their respective funds.
     “The dominos are starting to fall in the U.K. commercial property market, as yet another fund locks its doors on the back of outflows precipitated by the Brexit vote,” Laith Khalaf, a senior analyst at Hargreaves Lansdown, said after the move by Aviva. “It’s probably only a matter of time before we see other funds follow suit.”
     There were major drops in property companies’ shares. Barratt Developments was down 6.2 percent, Taylor Wimpey 6.5 percent and Persimmon 5.4 percent.
     Top EU officials, besides wondering with whom they will eventually negotiate, had sharp comments Tuesday about the U.K. leaders who pushed so hard to get Britain out of the EU — and then stepped aside.
     European Commission President Jean-Claude Juncker told EU lawmakers that “leave” figureheads Johnson and Farage “are not patriots.”
     “Patriots don’t resign when things get difficult,” he said. “They stay.”
     Guy Verhofstadt, the Liberal bloc leader in the EU Parliament, likened the U.K. resignations to “rats fleeing a sinking ship.”
     Lorne Cook in Brussels contributed to this report.
     Copyright 2016 The Associated Press. All rights reserved.

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