The relief rally in sterling on the resignation of an incompetent prime minister wasn’t much to shout about. The pound rose very modestly in the morning and gave back some of the gain in the afternoon. At $1.20-ish against the dollar, the currency still sits at roughly its lowest level since the 2016 referendum, barring a few wild trading days at the start of the pandemic. In an ugly contest with the euro, which is spooked by the threat of rising bond yields among its weaker members, the two currencies are at level pegging.

Markets look at the wider picture: post-Brexit and post-pandemic economic policymaking in the UK is still a vacuum. The economy almost certainly contracted in the second quarter of this year, even before consumers are hit with the next clunking hike in their energy bills in October, an event that will tip inflation over 10% in all likelihood and emphasise how the UK’s price squeeze is a notch or two more severe than that of other major economies.

On that little list, only the policymaking paralysis is possibly improved by Boris Johnson’s overdue exit. Even there, though, a subplot to this week’s events exposed the depth of the rift in Tory ranks over strategy, as evidenced by ex-chancellor Rishi Sunak’s reference in his resignation letter to his and Johnson’s “fundamentally different” approaches to economic management.

That split – Sunak’s emphasis on fiscal discipline and “difficult decisions” versus the instinctive urge for quick tax cuts – will now be played out via the circus of a leadership contest. Nadhim Zahawi has nailed his colours to the tax-cutting mast, as described here yesterday, but half the likely runners are a mystery. Does anybody have any idea about the fiscal tendencies of, say, the defence secretary, Ben Wallace, currently second favourite with the bookies?

“The uncertainty around the identity of the next PM could reignite downward pressures [on sterling], particularly if the contest doesn’t result in a clear policy direction,” said Oxford Economics’ chief economist, Andrew Goodwin. Yes, that seems a safe prediction. Investors will be braced to hear crowd-pleasing promises of tax cuts but don’t know the degree to which they will be honoured until the next budget, which may still come only in November.

Over in the real world of business, there is a sense that the whole tax cuts-versus-rectitude debate shouldn’t be the top obsession anyway since the practical room for manoeuvre is limited. Most boardrooms, one suspects, would rather hear a honest debate about how to reset trading relations with the EU and how to fill shortages in skilled and temporary labour. The supply side of the economy, not just demand, matters. Since that terrain is still regarded as Brexity, one doubts it’ll be front and centre.

Watch the level of sterling over the next few weeks: stability still feels a long way off.

Sainsbury’s pay protest falls short

In the end, the campaigners trying to force Sainsbury’s to become an accredited “real living wage” employer got middling support – 16.7%.

On the one hand, that’s less than the 20% that is often regarded as a minimum target since it obliges a company to engage formally. On the other, a quarter of Sainsbury’s shares are owned by two big investors, the Qatar Investment Authority and Czech billionaire Daniel Křetínský, who were presumably loyal to the board, so an eye-catching figure was probably out of reach anyway.

ShareAction collected some big-name backers from the fund management world for its campaign – notably Legal & General, HSBC and Fidelity – and vowed to keep pressing on. Good. The cause of securing decent shopfloor wages, especially for contracted workers such as security guards and cleaners, deserves more attention. Sainsbury’s, note, pays at least the real living wage to all its staff, but not to all agency workers.

Yet a rethink of campaign tactics might be advisable since the defence from the Sainsbury’s boardroom had a certain force to it: it is very hard for a company to make a binding commitment over a large chunk of its cost case when commercial rivals would not be covered by the same pledge. Therein lies a structural problem with single-company special resolutions: if you make them so precise, you run into the problem of respecting management’s right to manage.