On Monday, July 11, U.K. Energy Minister Andrea Leadsom withdrew from the race for prime minister. The Tories decided to end the leadership contest with Leadsom’s exit, giving the PM job to Theresa May. She officially took over the role on Wednesday, July 13.

In this report, we will begin with a discussion of how she won. We will offer a short biography of May, focusing on her accomplishments, temperament and leadership style. We will also discuss her mandate and the odds of early elections. As always, we will conclude with the potential impact on markets.

The Winning Formula
May’s path to 10 Downing Street can best be summarized by a famous quote from Napoleon Bonaparte, who said that one should “never interrupt your enemy when he is making a mistake.” She initially faced five competitors, although only three had a realistic chance of winning the PM job.

After the first two competitors exited, Michael Gove was the next to go. Gove is a controversial figure. Initially, he was managing the campaign of the earlier frontrunner Boris Johnson, the former Mayor of London. However, in a stunning act of disloyalty, just hours before Johnson was to formally announce his candidacy for PM, Gove gave a press conference indicating that he could no longer support Johnson. Later that day, instead of announcing his candidacy, Johnson indicated he would not run. Gove’s downfall was due, in part, to his betrayal of Johnson. The remaining two candidates, Leadsom and May, were expected to face a full Conservative Party vote in September. However, Leadsom made a fatal unforced error when she gave an interview to the Times (London) suggesting that she would make a better PM because she is a “mum.” May is married but childless. When the Times ran the story, Leadsom angrily argued she had been misquoted and so the paper released the transcripts, which, though difficult to believe, put Leadsom in an even worse light than the paper’s story. This controversy doomed Leadsom’s campaign and she withdrew last week, giving the PM job to May without a vote.

Thus, the key to May’s success was to simply remain quiet while her opponents destroyed their chances for the lead post through betrayal and ill-advised comments. May only gave one speech before her victory, which we will discuss below. However, in a world of social media, the discipline she showed by not reacting is unusual. The strategy proved to be effective.

Who is Theresa

May? May is 59 years old, married for 35 years to a banker. She has been involved in Tory politics since the mid-1980s and became an MP in 1997 after losing two earlier elections. She held several Shadow positions when the Conservatives were out of power during Tony Blair’s governments. May became the first woman to hold the position of Chair of the Conservative Party in 2002.

In 2010, after David Cameron built a ruling coalition with the Liberal/Democrat Party, May was given the position of Home Secretary; in U.S. terms, this role combines Homeland Security with much of the responsibilities of the Justice Department. It is something of a graveyard for political careers.1 She managed the role unusually well, becoming the longest tenured Home Secretary in over 50 years.

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Meet Theresa May