“Businesses calls for political stability as outlook worsens” ran a headline in the Financial Times on 21 October, the day after Liz Truss resigned as Prime Minister.

Two days later, former Governor of the Bank of England Mervyn King said when asked about the Conservative Party leadership election, “frankly they’ll be looking just as much, if not more so, at what the Labour Party is saying, rather than the Conservative candidates.”

So at this stage what do we know and what is froth and spray?

By the end of Monday we will know which of the two leadership candidates – Penny Mordaunt or Rishi Sunak – have won what number of votes among the electorate that is the Conservative Parliamentary Party. Until that moment, which will come soon enough, everything is speculation.

At that point, Monday evening, we will know if we have a new Leader of the Conservative Party and probable Prime Minister. Otherwise we will have to wait until Friday.

That, bluntly, is all we know for sure at this point about the leadership election.

We know other things though. We know that the financial markets will open at 8am on Monday morning. They have at least one and maybe five days of immediate political uncertainty to contend with. How they respond we can only wait and see. What happens at Westminster is now only half the story. What happens over in the City is the other half. We know that if the markets do not like what they see, the political life span of the government will shorten.

We know that whoever is elected Leader of the Conservative Party is likely to be appointed Prime Minister by the King on the recommendation of Liz Truss, the current Prime Minister, on the basis that she or he is the person most likely to command a majority in the House of Commons. The assumption, and it is reasonable, is that because the Conservative Party won a majority of eighty or so at the last General Election that it automatically passes to whoever is elected Leader of that Party. In reality however it is unclear what practical working majority the new leader will have.

It seems quite possible that whoever is elected will suffer immediate defections, promises of unyielding opposition, and considerable resistance from the disaffected and aggrieved groups of Conservative Members of Parliament who were not attached to the winning candidate. On this basis, Liz Truss would be well advised to hasten to the Palace as quickly as possible to avoid the possibility that new Leader of the Conservatives cannot form a majority government and that the only thing now is for her to recommend to the King the dissolution of Parliament and the calling of an immediate General Election so we the voters can sort it all out. This may seem far-fetched but passions are currently running so high and animosity so deep within Conservative ranks that it would be foolish not to consider the possibility.

Political power is always fluctuating. It moves always to where it finds political or institutional strength. It is always a mistake to mistake the holding of an office for real power. Melvyn King is right. Assuming though the new Leader can demonstrate they can form a government they will be appointed Prime Minister, either today or on Friday. Or indeed on any day of this week because it is possible that of the two candidates going forward to the Conservative Party membership ballot one might pull out at any point. Unfortunately, the certainty business craves is not going to arrive any time soon.

There is one other thing we know. We know, because both Penny Mordaunt and Rishi Sunak, have said so, that Jeremy Hunt will remain as Chancellor of the Exchequer. The moment Liz Truss appointed him to the Treasury he became both unsackable and the most powerful member of the government. Assuming he is willing to serve whoever is elected Leader, and so far he has not said he would not, Jeremy Hunt’s plans and power remain the dominant force in government. Whoever becomes Party Leader and Prime Minister the reality is that, if he wants to be, the real winner of this political mud-wrestle is Jeremy Hunt.

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