Interior Minister Theresa May has opened up a commanding lead over her nearest rival.
Her nearest rival Andrea Leadsom, in the contest to become Britain's next prime minister, but the race has been overshadowed by post-Brexit carnage for property investors and the pound.
Key points:
- May wins 165 votes, well clear of second-placed Leadsom
- Fox drops out of race with only 16 votes
- Pound dives to 31-year low
In symptoms of market concern about the economic impact of leaving the European Union, sterling hit new 31-year lows and three funds investing in British property said they were suspending trading because too many people were rushing to withdraw their money at once.
Ms May won 165 votes in a first ballot of Conservative members of parliament and Ms Leadsom, a junior energy minister, won 66, increasingly the likelihood that Britain will get its second female prime minister after Margaret Thatcher.
Former Defence Minister Liam Fox won the fewest votes, 16, and was eliminated from the battle to replace David Cameron, who has said he will step down after Britons voted in a June 23 referendum to break away from the EU.
Works and Pensions Minister Stephen Crabb, who won 34 votes, announced shortly after the contest that he was withdrawing and would support Ms May.
Justice Minister Michael Gove placed in third position with 48 votes.
"There is a big job before us: to unite our party and the country, to negotiate the best possible deal as we leave the EU, and to make Britain work for everyone," said Ms May, 59.
"I am the only candidate capable of delivering these three things as prime minister, and tonight it is clear that I am also the only one capable of drawing support from the whole of the Conservative Party."
The selection process will ultimately be decided by about 150,000 Conservative Party members in September, once MPs have whittled the field down to two candidates.
Given strong eurosceptic sentiment among grassroots Conservatives, Ms Leadsom, 53, is still very much in contention.
She was a leading voice in the Leave campaign, while Ms May favoured remaining inside the 28-nation EU.
Ms Leadsom backer Stewart Jackson told Sky News: "This shows she's ready to go all the way, there isn't going to be a coronation" of Ms May.
Another British property fund suspends trade
Signs are already multiplying that concern about the impact of Brexit on trade, investment and business confidence is starting to hit the economy.
The 4.4 billion-pound ($7.6 billion) Property Portfolio run by M&G Investments, the fund arm of insurer Prudential, was the latest fund to suspend business on Tuesday afternoon.
Insurer Aviva's fund arm had earlier stopped trading in its 1.8 billion-pound ($3.1 billion) UK Property Trust, while rival Standard Life Investments suspended a 2.9 billion-pound ($5.1 billion) fund late on Monday.
Shares plunged in other property-related funds, and asset managers and insurers were also hit.
The pound, which has borne the brunt of market concern about potential damage to the economy, fell to new 31-year lows, down more than 12 per cent since the referendum.
"There is evidence that some risks have begun to crystallise. The current outlook for UK financial stability is challenging," the Bank of England said, announcing measures to encourage banks to keep lending.
Voters were bombarded in the run-up to the referendum with warnings from Mr Cameron and a host of financial institutions and think tanks that Brexit would plunge Britain into a self-inflicted recession by jeopardising its access to the EU's tariff-free single market.
The Leave campaign derided such claims as "project fear", arguing Britain would prosper by regaining "independence" from Brussels and freeing itself to set its own laws, clinch its own trade deals and set a cap on immigration — something it cannot do under EU rules allowing free movement throughout the bloc.
Reuters