The British pound surged on Thursday after Prime Minister Boris Johnson resigned following dozens of resignations from his government. The broader financial markets also rallied on the news, allowing multiple indexes to enjoy some gains after a brutal first half of 2022.

It was discovered that Chris Pincher, a Member of Parliament who was appointed as deputy chief whip by Johnson, became inebriated at a private member club in London and sexually groped two men. It was later learned that the prime minister knew of the incident but he appointed him anyway.

In front of 11 Downing Street, the prime minister announced his resignation, just weeks after winning a confidence vote. He confirmed that he intends to stay on as prime minister until a new Conservative leader is chosen, but it is unclear if his party will allow this to happen.

It is more likely that Deputy Prime Minister Dominic Raab will take on the caretaker role.

Johnson became prime minister in 2019 when the Tories enjoyed a landslide victory.

“It is clearly now the will of the Parliamentary Conservative Party that there should be a new leader of that party and therefore a new Prime Minister,” he said in prepared remarks. “And I have agreed … that the process of choosing that new leader should begin now, and the timetable will be announced next week … I have today appointed a cabinet to serve as I will until a new leader is in place.”

Markets were ebullient on the news as the FTSE 100 advanced 1.27% to just under 7,200. UK government bonds also jumped, with the benchmark 10-year yield up 1.3 basis points to 2.104%.

The British pound was the main beneficiary as the GBP/USD currency pair rose 0.34% to 1.1966, from an opening of 1.1926, at 13:32 GMT on Thursday. The GBP/JPY climbed 0.25% to 162.48, from an opening of 162.08.

On the data front, the Halifax House Price Index rose 1.8% in June, while the mortgage rate edged up to 4.38%. Labor productivity tumbled 0.6% in the first quarter. The S&P Global CIPS Construction purchasing managers’ index (PMI) also fell to 52.6 in June.