- Pound drops as worries over May’s premiership grow.
- Tory MPs are reportedly plotting to oust May.
- Sterling falls below 1.31 against the dollar as a result.
LONDON — The pound slipped below the $US1.31 mark on Monday morning, as rumours grew that a number of Conservative MPs are planning an attempt to oust Prime Minister Theresa May, further complicating the already muddy picture of UK politics.
Reports emerged over the weekend that 40 Conservative MPs have agreed to sign a letter of no-confidence in May, just eight short of the number needed to force a party leadership contest, the mechanism through which May could be forced from office and replaced by another Tory.
With Brexit talks ongoing, and May’s government already dangerously weak following a series of resignations from high profile ministers in the last weeks, any further sign of weakness would likely spell bad news for the pound, which has fallen significantly recently as Brexit uncertainty continues to put investors off the currency.
On Monday morning, Sterling has dropped more than 0.7%, falling to a level of 1.3072 against the dollar by around 10.35 a.m. GMT (5.35 a.m. ET), as the chart below shows:
“There’s A LOT for May to fret about at the moment. She could be facing defeat on part of her Brexit Bill later in the week, with Tory Remainers likely to team up with Labour to try and secure Parliament a meaningful vote on any deal with the EU, something the PM is keen to avoid,” Connor Campbell, market analyst at Spreadex said in an email a little earlier.
“There’s also threats from Michel Barnier — who stated at the weekend the EU was preparing for a ‘no deal’ scenario — that if Britain doesn’t spell out how far it intends to ‘honour its obligations’ within the next 2 weeks then any trade talks will have to be ‘put back’.”
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