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| Pound falls below $1.31 as pressure mounts on Theresa May over Brexit - business live | Pound falls below $1.31 as pressure mounts on Theresa May over Brexit - business live |
| (35 minutes later) | |
| City traders are studying the headlines and concluding that Theresa May is at her weakest position since June’s general election, says Connor Campbell of SpreadEx. | |
| He writes: | |
| 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. | |
| 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’. | |
| Finally, there’s the leaked ‘Orwellian’ letter from Michael Gove and Boris Johnson – back to scheming after last year’s Tory leadership falling out – to May, with the prominent Leaver MPs outlining a series of secret Brexit demands. | |
| The pound is also losing ground against the euro, down almost one euro cent at €1.122. | |
| The weaker pound has pushed up share prices in London (as it makes overseas earnings more valuable). | The weaker pound has pushed up share prices in London (as it makes overseas earnings more valuable). |
| The FTSE 100 has gained 22 points, or 0.3%, to 7455 points. | The FTSE 100 has gained 22 points, or 0.3%, to 7455 points. |
| This is the pound’s biggest fall in a week, according to Bloomberg. | This is the pound’s biggest fall in a week, according to Bloomberg. |
| They say: | They say: |
| Sterling fell as much as 0.8 percent to $1.3092 as leveraged accounts aggressively sold the currency, according to traders in London, who asked not to be identified as they weren’t authorized to speak publicly. | Sterling fell as much as 0.8 percent to $1.3092 as leveraged accounts aggressively sold the currency, according to traders in London, who asked not to be identified as they weren’t authorized to speak publicly. |
| Here’s a chart showing how the pound dropped this morning: | Here’s a chart showing how the pound dropped this morning: |
| Hussein Sayed, chief market strategist at FXTM, says sterling is suffering from Theresa May’s weak position: | Hussein Sayed, chief market strategist at FXTM, says sterling is suffering from Theresa May’s weak position: |
| Sterling fell more than 0.5% early Monday, after the Sunday Times reported yesterday that 40 Conservative Party MPs agreed to sign a letter of no confidence in the Prime Minister, Theresa May. While this remains short of the 48 votes needed to force a new leadership, it still creates much frustration amongst investors seeking clarity on Brexit negotiations. | Sterling fell more than 0.5% early Monday, after the Sunday Times reported yesterday that 40 Conservative Party MPs agreed to sign a letter of no confidence in the Prime Minister, Theresa May. While this remains short of the 48 votes needed to force a new leadership, it still creates much frustration amongst investors seeking clarity on Brexit negotiations. |
| With May’s position being potentially at risk and no significant progress after six rounds of talks with EU, Sterling may come under increased pressure in the next couple of days, with the $1.3024 support level at risk of being breached. A leaked letter from Boris Johnson and Michael Gove pushing for Hard Brexit, add to the uncertainty as House of Commons meet on Tuesday. | With May’s position being potentially at risk and no significant progress after six rounds of talks with EU, Sterling may come under increased pressure in the next couple of days, with the $1.3024 support level at risk of being breached. A leaked letter from Boris Johnson and Michael Gove pushing for Hard Brexit, add to the uncertainty as House of Commons meet on Tuesday. |
| But....Elsa Lignos of Royal Bank of Canada suggests Tory MPs will be reluctant to oust May, given the opposition Labour party’s solid performance in the polls... | But....Elsa Lignos of Royal Bank of Canada suggests Tory MPs will be reluctant to oust May, given the opposition Labour party’s solid performance in the polls... |
| We have argued before that UK political risk is underpriced (bookies odds point to a high probability of an election in 2018 or 2019, with Corbyn as the single most likely next prime minister). But note there were 35 MPs ready to sign a no confidence letter after May’s chaotic party conference speech and the hurdle to be MP number 47 or 48 should be high, given Labour’s performance in the polls. | We have argued before that UK political risk is underpriced (bookies odds point to a high probability of an election in 2018 or 2019, with Corbyn as the single most likely next prime minister). But note there were 35 MPs ready to sign a no confidence letter after May’s chaotic party conference speech and the hurdle to be MP number 47 or 48 should be high, given Labour’s performance in the polls. |
| The pound is still down 10% compared to its value before the EU referendum (when it was worth almost $1.50). | The pound is still down 10% compared to its value before the EU referendum (when it was worth almost $1.50). |
| Kit Juckes of French bank Societe Generale tweets: | Kit Juckes of French bank Societe Generale tweets: |
| Markets ended last week with a risk wobble as EM and HY spreads widened and Govt yields rose. This morning, all about 40 MPs losing confidence in T May. £ down. But U.K. govt shambles is mostly priced in & change can be good. | Markets ended last week with a risk wobble as EM and HY spreads widened and Govt yields rose. This morning, all about 40 MPs losing confidence in T May. £ down. But U.K. govt shambles is mostly priced in & change can be good. |
| (EM = emerging markets, HY = high yield, or riskier bonds that give a better return. The rest doesn’t require translation....) | (EM = emerging markets, HY = high yield, or riskier bonds that give a better return. The rest doesn’t require translation....) |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| The pound has fallen this morning as pressure mounts on prime minister Theresa May over Britain’s exit from the European Union, ahead of some crucial votes in parliament this week. | The pound has fallen this morning as pressure mounts on prime minister Theresa May over Britain’s exit from the European Union, ahead of some crucial votes in parliament this week. |
| Sterling has shed almost a cent this morning, to below $1.31, after the Sunday Times reported that 40 Conservative members of Parliament have agreed to sign a letter of no confidence in her. | Sterling has shed almost a cent this morning, to below $1.31, after the Sunday Times reported that 40 Conservative members of Parliament have agreed to sign a letter of no confidence in her. |
| That’s close to the number needed to trigger a formal leadership battle, creating new jitters in the City and beyond about the stability of the UK government. | That’s close to the number needed to trigger a formal leadership battle, creating new jitters in the City and beyond about the stability of the UK government. |
| The British pound falls after news reports that members of Parliament want Theresa May to resign https://t.co/SkvSE606BB pic.twitter.com/JzYAlix7W5 | The British pound falls after news reports that members of Parliament want Theresa May to resign https://t.co/SkvSE606BB pic.twitter.com/JzYAlix7W5 |
| In another significant move, foreign secretary Boris Johnson and environment secretary Michael Gove have written a letter to May complaining that “some parts of Government” aren’t doing enough to prepare for a hard Brexit. | In another significant move, foreign secretary Boris Johnson and environment secretary Michael Gove have written a letter to May complaining that “some parts of Government” aren’t doing enough to prepare for a hard Brexit. |
| This letter, which leaked over the weekend, appears to be an attempt to undermine chancellor Philip Hammond (as he puts the finishing touches to next week’s budget). | This letter, which leaked over the weekend, appears to be an attempt to undermine chancellor Philip Hammond (as he puts the finishing touches to next week’s budget). |
| GUARDIAN: Brexiteers send PM ‘Orwellian’ set of demands #tomorrowspaperstoday pic.twitter.com/M5tkspLrFG | GUARDIAN: Brexiteers send PM ‘Orwellian’ set of demands #tomorrowspaperstoday pic.twitter.com/M5tkspLrFG |
| One minister has described the move as “Orwellian”, suggesting that the cabinet is badly split as MPs return to parliament to debate the Brexit bill. | One minister has described the move as “Orwellian”, suggesting that the cabinet is badly split as MPs return to parliament to debate the Brexit bill. |
| My colleagues Rajeev Syal and Jon Henley report: | My colleagues Rajeev Syal and Jon Henley report: |
| Another minister said: “I doubt they thought this would ever come out. It stinks to high heaven. May will have to dress them down or look weak.” | Another minister said: “I doubt they thought this would ever come out. It stinks to high heaven. May will have to dress them down or look weak.” |
| Another former cabinet minister said: “I can’t believe this has come out. This is exactly the kind of arm-twisting by Brexiters one expects to go on behind the scenes, but the fact that it is in the public and is being inflicted upon the prime minister is remarkable.” | Another former cabinet minister said: “I can’t believe this has come out. This is exactly the kind of arm-twisting by Brexiters one expects to go on behind the scenes, but the fact that it is in the public and is being inflicted upon the prime minister is remarkable.” |
| It all tees up another dramatic week, with parliament due to start debating the EU withdrawal bill again on Tuesday. There will be fireworks, with a group of MPs planning to propose an amendment to give Parliament a binding vote on the final divorce deal between Britain and the EU..... | It all tees up another dramatic week, with parliament due to start debating the EU withdrawal bill again on Tuesday. There will be fireworks, with a group of MPs planning to propose an amendment to give Parliament a binding vote on the final divorce deal between Britain and the EU..... |
| Also coming up today... | Also coming up today... |
| Bookmaker Ladbrokes and housebuilder Taylor Wimpey are reporting results this morning. | Bookmaker Ladbrokes and housebuilder Taylor Wimpey are reporting results this morning. |
| We’ll also keep an eye on the Dubai Air Show - yesterday, Emirates announced a $15bn deal with Boeing. That was a surprise, as Airbus was expected to win a big deal for its Airbus A380 superjumbo - can it bounce back today? | We’ll also keep an eye on the Dubai Air Show - yesterday, Emirates announced a $15bn deal with Boeing. That was a surprise, as Airbus was expected to win a big deal for its Airbus A380 superjumbo - can it bounce back today? |