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You can find the current article at its original source at http://www.theguardian.com/business/2018/nov/15/pound-falls-steeply-as-brexit-resignations-rock-the-government
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| Version 2 | Version 3 |
|---|---|
| Pound tumbles as UK markets suffer Brexit deal volatility | Pound tumbles as UK markets suffer Brexit deal volatility |
| (35 minutes later) | |
| Britain’s financial regulator has been in contact with City firms as a raft of resignations over Theresa May’s Brexit deal hit markets, sending the pound lower and putting UK housebuilders on track for their worst one-day drop since 2016. | Britain’s financial regulator has been in contact with City firms as a raft of resignations over Theresa May’s Brexit deal hit markets, sending the pound lower and putting UK housebuilders on track for their worst one-day drop since 2016. |
| The Financial Conduct Authority (FCA) is understood to have been in touch with stock exchanges, bigger banks, and asset management companies regarding market volatility. | The Financial Conduct Authority (FCA) is understood to have been in touch with stock exchanges, bigger banks, and asset management companies regarding market volatility. |
| An FCA spokesman said: “As you would expect in this type of situation we have regular contact with firms and will continue to engage with them.” | |
| Investors were offloading shares in FTSE quoted companies and UK currency holdings in an effort to reduce their exposure to the British economy. | Investors were offloading shares in FTSE quoted companies and UK currency holdings in an effort to reduce their exposure to the British economy. |
| Housebuilders Persimmon and Taylor Wimpey were among the worst performing stocks on the FTSE 100, falling as much as 9% each. Barratt Developments and Berkeley Group fell 8.4% and 7.1% respectively. | Housebuilders Persimmon and Taylor Wimpey were among the worst performing stocks on the FTSE 100, falling as much as 9% each. Barratt Developments and Berkeley Group fell 8.4% and 7.1% respectively. |
| Stocks in the construction sector were on course for their largest one-day fall since the UK voted to leave the EU two years ago, with their decline contributing to a 0.5% drop on the FTSE 100. | |
| Royal Bank of Scotland, which is still 62% owned by the government, was down nearly 9%. | Royal Bank of Scotland, which is still 62% owned by the government, was down nearly 9%. |
| The pound also took a tumble against major international currencies, dropping from above $1.30 to $1.27 against the US dollar by Thursday afternoon, a drop of 1.8%. Against the euro, sterling fell by 1.8% to €1.12. | The pound also took a tumble against major international currencies, dropping from above $1.30 to $1.27 against the US dollar by Thursday afternoon, a drop of 1.8%. Against the euro, sterling fell by 1.8% to €1.12. |
| Sterling was on course for its biggest one-day drop against both currencies since October 2016. | Sterling was on course for its biggest one-day drop against both currencies since October 2016. |
| Laith Khalaf, a senior analyst at Hargreaves Lansdown, said: “The market has taken a big red pen to stocks which are heavily exposed to the UK economy like the banks, retailers and housebuilders. | Laith Khalaf, a senior analyst at Hargreaves Lansdown, said: “The market has taken a big red pen to stocks which are heavily exposed to the UK economy like the banks, retailers and housebuilders. |
| “These sectors were already under pressure, but the potential for an orderly Brexit to unravel in the next few days is causing further distress to be manifested in share prices.” | “These sectors were already under pressure, but the potential for an orderly Brexit to unravel in the next few days is causing further distress to be manifested in share prices.” |
| He said the weaker pound was helping buoy the FTSE 100, as the relative strength of foreign currencies tends to boost the share price of international firms whose revenue largely comes from overseas. | He said the weaker pound was helping buoy the FTSE 100, as the relative strength of foreign currencies tends to boost the share price of international firms whose revenue largely comes from overseas. |
| “However, if sustained, a weaker pound spells bad news for a retail sector which is already struggling, as it raises the price of imported goods and at the same time squeezes consumer incomes,” Khalaf added. | |
| Markets were reacting to chaos on the government benches, as senior Brexit-backing ministers objected to a draft withdrawal agreement with the EU that the prime minister presented to the cabinet on Wednesday after months of negotiations between British and EU officials. | Markets were reacting to chaos on the government benches, as senior Brexit-backing ministers objected to a draft withdrawal agreement with the EU that the prime minister presented to the cabinet on Wednesday after months of negotiations between British and EU officials. |
| Dominic Raab and Esther McVey resigned from their positions as Brexit secretary and the work and pensions secretary on Thursday morning, saying they could not support the draft deal. They were later joined by junior ministers Suella Braverman and Shailesh Vara. | Dominic Raab and Esther McVey resigned from their positions as Brexit secretary and the work and pensions secretary on Thursday morning, saying they could not support the draft deal. They were later joined by junior ministers Suella Braverman and Shailesh Vara. |
| The FTSE 250 index – which is comprised of more UK-focused stock than the FTSE 100 – was trading down 2.1%, its lowest level in two and a half weeks. It was also dragged down by house building stocks with Countryside and Bovis Homes down 9.7% and 8.5%, respectively. | The FTSE 250 index – which is comprised of more UK-focused stock than the FTSE 100 – was trading down 2.1%, its lowest level in two and a half weeks. It was also dragged down by house building stocks with Countryside and Bovis Homes down 9.7% and 8.5%, respectively. |
| Khalaf said a lack of certainty around Brexit would mean further pain for markets. | Khalaf said a lack of certainty around Brexit would mean further pain for markets. |
| “We can expect continued volatility in financial markets while political uncertainty swirls around Westminster.” | “We can expect continued volatility in financial markets while political uncertainty swirls around Westminster.” |
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