Boris Johnson has been confirmed as the UK’s next prime minister — a result that led to the pound dipping slightly to $1.24 and greatly increased the likelihood of the country crashing out of the European Union.

After almost two months of campaigning, Johnson easily saw off foreign secretary Jeremy Hunt in the race to succeed Theresa May as leader of the UK’s ruling Conservative Party, securing 66% (92,153) of the votes cast by its members.

Johnson, a former foreign secretary and ex-mayor of London, has been the front runner since May announced her intention to stand down in early June.

May quit after failing in numerous attempts to convince the UK parliament to back her terms for exiting the EU. Brussels ultimately granted a six-month extension to the Brexit process — to October 31 — to allow UK MPs more time to reach a consensus.

Johnson campaigned on the pledge of trying to secure a better deal that could pass the House of Commons, but taking the UK out of the bloc without one if these efforts failed.

Sterling dipped to $1.24, continuing to drop for the third straight day. The FTSE 100 index of leading shares remained stable, edging up by 0.64%.

Leaving the EU without a withdrawal agreement has widespread implications for the UK’s financial services industry, including the potential overnight loss of access to the EU single market.

Banks and fund managers have been preparing for this worst-case scenario and many have started to shift certain London-based employees and assets to the continent to ensure they can continue to do business there in the event of a no-deal.

In a statement, the credit rating agency Moody’s warned: “A no-deal Brexit would have significant negative credit effects for the UK sovereign and related issuers.”

Here is the City of London’s reaction to Johnson’s victory:

Savvas Savouri, chief economist, Toscafund

“Where do we find ourselves? Boris as PM. No surprise at all. The issue is whether a majority of the present parliament can ever be persuaded to accept a deal of his creation. I simply cannot see it happening. This is why a general election cannot be avoided, and one sooner than later seems eminently sensible to provide the new Tory leader with a parliamentary majority to take to the EU to get a negotiated settlement to this.”

Leigh Himsworth, portfolio manager, Fidelity International

“With Boris Johnson as prime minister, the options facing the UK remain broadly the same: a withdrawal agreement similar to that presented by Theresa May, a general election to win a greater majority for the Conservative party or a new referendum. The outcome will depend on how confident Boris feels in his own political power. His support of the Leave campaign gives him leverage over the right wing while the bluster may win Labour Leave voters. His personal background may help him retain the Tory heartland. But the key question is whether he will be able to extend his charm over the Channel.”

Crispin Odey, founder, Odey Asset Management

“It’s good news. I’m very happy and pleased. Let’s see what happens.”

Azad Zangana, senior European economist, Schroders

“Europe has held firm on the all aspects of the Withdrawal Agreement, but has hinted that the section on the future relationship could be re-opened...we highly doubt that Johnson will succeed in securing any significant changes in the time that he has. Both Parliament and much of Europe are about to break for summer recesses, which will then be followed by party conference season in September. In reality, there are a mere few weeks for Johnson’s team to complete negotiations before the 31 October Brexit deadline.”

Helen Morrissey, pension specialist, Royal London

“While Boris’s in-tray is likely to be straining under the weight of Brexit related issues there’s a domestic agenda that has been in limbo for far too long. We call upon the Prime Minister to devote some time to pressing issues such social care funding and the Pensions Bill which will allow the industry to make much needed progress with initiatives such as the pensions dashboard.”

Colin Dryburgh, co-manager, Kames Diversified Growth fund

“Whatever your view of it, the US government is stable and delivering coherent economic policies; a far cry from the mess in the UK which sees Boris as a manifestation rather than a cure... the challenge for the pound is that, with few things in its favour, it is not sufficiently cheap to absorb the risks on both the conclusion of Brexit and the vagaries of domestic politics. Boris and Trump may have similar hairstyles but Boris is likely to prove much more hair-raising.”

Paul O’Connor, head of the UK-based multi-asset team, Janus Henderson

“If we look to betting markets as a guide to consensus expectations, we see a no-deal Brexit is a one-in-three chance, with investor dread of this being somewhat offset by the view that there is still a one-in-four chance that Brexit is cancelled (Article 50 is revoked). The perceived likelihood of a 2019 general election has been growing in recent months, highlighting another layer of uncertainty surrounding the UK outlook and yet another reason for global investors to stay away.”

Philip Smeaton, chief investment officer, Sanlam UK

“Love him or loathe him, Boris Johnson’s elevation to the highest office in the land is unsurprising... While the chances of leaving with a no-deal have significantly increased, we still question whether this is a viable route considering the parliamentary arithmetic. Equally, we don’t believe the EU will cave to the UK’s demands around the Irish backstop and hand a victory to Johnson and the hard-core European Research Group. Despite having a new prime minster, it’s still a case of catch-22 for the UK.”

Jason Borbora-Sheen, co-portfolio manager, Investec Diversified Income fund

“The ongoing uncertainty around Brexit is arguably the worst outcome for UK assets and we must be realistic that even as our newly appointed prime minister takes his seat in Number 10, the ambiguity for the UK will likely continue long into the future as the trading relationship is negotiated. Therefore, we believe it is vital for investors to take a highly selective approach to allocating to the UK.”

Robert Wood, global head of wealth management and insurance, TORI Global

“Financial services leaders in the UK are worried. Boris Johnson’s far more aggressive approach to Brexit is a deep concern. The knock-on impact to investment markets is largely priced in, but a no-deal exit could see further volatility as markets work through what it means in practice. The operational impact on the financial services industry in the UK could be profound, with many roles and capabilities switching to Europe, and in particular Dublin.”

Nigel Green, chief executive, deVere Group

“The importance of clarity for the markets and business should not be underrated. It now just remains to be seen if the former London mayor and foreign secretary delivers on what he has said – or whether there will simply be more Boris bluster, which would sink the pound further and kill off investment hopes.”

Neil Wilson, chief market analyst, Markets.com

“Remember this is not just a new leader, but an entire new regime. The content, tone and emphasis from Number 10 will be very different to what we had under May. We would reiterate that there is a heightened prospect of no-deal under BoJo, yet when faced with the realpolitik of it all, a compromise may well be found.”

Edwin Morgan, interim director general, Institute of Directors

“The UK faces long-term skills challenges that have contributed to stalling productivity growth across sectors and regions. Firms are crying out for infrastructure upgrades, while high costs and uncertainty are often stalling their own investment plans. A no-deal Brexit would only add to the uncertainty and distract from these challenges, but avoiding a disorderly exit will enable the country to focus on them and move forward to everyone's benefit.”