Pound slips lower as May faces leadership pressure

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POUND has fallen amid market jitters over increasing pressure facing Theresa May’s leadership.

Sterling dropped by more than a cent against the US dollar to less than $1.31 and was also down by a cent against the euro. It comes amid reports that 40 Conservative MPs are prepared to sign a letter of no confidence in the Prime Minister. Mrs May also faced weekend claims that she was being held “hostage” by Boris Johnson and Michael Gove about how to deliver Brexit. Joshua Mahony, market analyst at IG, said: “The potential for yet another political upheaval in the UK has no doubt grabbed market attention.” Kit Juckes, global fixed income strategist at Societe Generale, said: “Sterling is priced for soggy (economic) growth and difficult (political) negotiations.” The pound’s latest wobble comes as the time frame for trying to reach the next stage of Brexit negotiations comes into sharp focus. EU chief negotiator Michel Barnier said on Friday that the UK must clarify or concede more in the next two weeks if it wants to move on to trade talks in December. Meanwhile, the CBI and its counterparts from Europe’s largest economies are meeting the Prime Minister on Monday to urge her to fight for an immediate transition deal. The value of the pound collapsed after the vote to leave the European Union in June last year and was as low as $1.20 against the dollar earlier in 2017. Since then it has partially recovered but the pound is still around 13% lower than just before the referendum result emerged.

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