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Michael Gove has been appointed as Defra secretary in a cabinet reshuffle by Prime Minister Theresa May in a move welcomed by the food and drink industry.

In an attempt to deal with unrest in the ranks of the Conservative party after last week’s general election result, May brought former justice minister Gove back into her government as environment secretary.

It comes less than a year after the PM sacked her leadership rival in a July reshuffle in 2016.

Former Defra secretary Andrea Leadsom, who ran against May in a leadership contest last year, has been moved to leader of the house.

FDF director general Ian Wright welcomed to appointment of a ‘heavy hitter’ to the cabinet.

“It is a big boost that the Prime Minister has appointed one of the cabinet’s heaviest hitters to a ministry so significantly at the heart of Brexit,” he said, commenting on the appointment.

“We very much look forward to working with Mr Gove and his new team. With them and with friends from NFU and across UK food and drink we will champion the growth of the industry in the exciting months to come.”

May also promoted work and pensions secretary Damian Green to her second in command as first secretary of state.

The majority of the high-profile members of the cabinet kept their posts in Sunday’s reshuffle, with Philip Hammond remaining at the Treasury, Boris Johnson staying at the Foreign Office and Amber Rudd holding the position of home secretary after narrowly avoiding losing her Hastings seat in the election.

Liam Fox remains as secretary of state for international trade, a key Brexit role, and David Davis will continue to lead Brexit negotiations as secretary of state for exiting the European Union.

Liz Truss was one casualty of the reshuffle, demoted from justice secretary to chief secretary to the Treasury.

The reshuffle followed the resignations of the PM’s co-chiefs of staff Nick Timothy and Fiona Hill, who faced heavy criticism from ministers for the disastrous election campaign.

The Conservatives lost their parliamentary majority in Thursday’s snap election, going from 331 seats to 318, while Labour increased its number of MPs from 232 to 262.

May is set to meet DUP leader Arlene Foster today as she looks to secure a deal to strengthen her minority Conservative government after Thursday’s election returned a hung parliament.

Morning update

London’s blue-chip index opened 0.3% lower to 7,503.86 points this morning as PM Theresa May attempts to calm the political waters following the loss of her majority last week.

Sterling, which crashed as the exit polls revealed a hung parliament was likely, stabilised today. The pound was little-changed against the dollar at $1.2739 and dipped 0.1% against the euro to €1.1367.

Steadying of sterling means the FTSE 100 companies, mostly made up of overseas earners, won’t get further currency translation boosts from the pound’s weakness.

The big fmcg hitters mostly fell as markets opened, with British American Tobacco (BAT) down 1.7% to 5,423p, Diageo (DGE) down 0.9% to 2,305.5p, Reckitt Benckiser (RB) slipping 0.8% to 7,890p and Compass Group (CPG) falling 0.7% to 1,657p.

Ocado (OCDO) had a bad start to the week after heavy losses last week as the City remained unimpressed with its international deal. The online grocer has plunged 3.1% to 280.9p so far.

Hilton Food Group (HFG) has leapt 3.8% to 769.5p after earning a consensus ‘buy’ rating from six research firms covering the stock.

Tesco (TSCO), Marks & Spencer (MKS) and B&M European Value Retailer (BME) have all opened higher than Friday’s close, up 0.5% to 181.6p, 0.3% to 361.2p and 0.3% to 357.9p respectively.

This week in the City

This week is looking a bit busier than the last few as we emerge from the election campaign. It’s The Grocer Gold awards on Tuesday, with the traditional supermarkets fighting the discounters for title of Grocer of the Year.

On Friday, Tesco is expected to report a strong first-quarter as its recovery under CEO Dave Lewis continues. Analysts at Jefferies said the supermarket looked set to report like-for-like UK sales growth of 1.9% in the period.

Wednesday brings a trading update from WH Smith.

Majestic WINE finals are on Thursday, along with the Morrisons AGM, with CEO David Potts’ pay in focus, a trading update from PZ Cussons and the ONS retail sales figures for May.

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