The British pound and U.K. government bond yields shot higher Thursday in reaction to the surprise resignation of Sajid Javid as chancellor of the exchequer, with markets anticipating more spending from the Boris Johnson-led government.

The pound GBPUSD, +0.6404%  traded at $1.3044 vs. $1.2960 on Wednesday, and the yield on the 10-year gilt TMBMKGB-10Y, +4.78%  rose 4.5 basis points to 0.68% as Javid announced his resignation, over what was reported to be his refusal to fire his advisers. Bond yields and price s move inversely to each other.

Rishi Sunak, a former hedge-fund professional and ex-Goldman Sachs analyst who has been chief secretary of the Treasury since July, is replacing Javid.

Read: Rishi Sunak’s appointment means Boris Johnson has full control of the U.K. Treasury. Now what?

“This news also solidifies Boris Johnson’s position giving him more free rein to get things done,” said David Zahn, head of European fixed income at Franklin Templeton. “Given his majority and fewer people to challenge him, the PM should be able to make decisions much quicker but it does mean we anticipate more spending than expected.”

The U.K. FTSE 100 UKX, -1.36%  meanwhile slumped 1.4% to 7431.43, as stocks reacted both to a spike in reported coronavirus cases in China as well as the strength in sterling.

Centrica CNA, -17.24%  shares plunged 17% as the U.K. electricity and gas provider said 2020 adjusted operating cash flow is likely to fall to the bottom end of a range of £1.6 billion to £1.8 billion if current commodity prices are maintained, after it fell 18% to £1.83 billion in 2019. Its adjusted operating profit last year fell 35% to £901 million, after a tariff cap in the U.K. and falling natural-gas prices.

Barclays BARC, -2.26%  shares slipped 2.5% as the bank said it may not meet its return-on-equity target in 2020. It also disclosed that U.K. financial regulators are probing the links between Chief Executive Jes Staley and Jeffrey Epstein. Barclays said Staley’s relationship with Epstein, who died by suicide last year in a Manhattan jail cell while facing federal sex-trafficking charges, was “professional.”