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| Pound hits 18-month low against US dollar as Brexit confusion swirls – business live | Pound hits 18-month low against US dollar as Brexit confusion swirls – business live |
| (35 minutes later) | |
| MPs are due to hear from Theresa May in less than 30 minutes time, in what’s certain to be a testing appearance at the dispatch box. | |
| Paul Hardy, Brexit director at legal firm DLA Piper, argues that the pain may not be worth it: | |
| “The political cost to Theresa May of delaying the vote could only be justified if she can come back from Brussels with significant changes to the draft Withdrawal Treaty - this is the legally binding document which puts the Irish backstop in place. | |
| This seems unlikely if the comments of the European Commission President, Jean-Claude Junker, made at the time the deal was adopted are taken at face value: “This is the best deal possible. I’m inviting those who have to ratify this deal in the House of Commons to take this into consideration. This is the best deal for the UK, the best deal for Europe, this is the only deal possible”.” | |
| At today’s 18-month low of $1.261, the pound in your pocket is worth 15% less than on the day of the EU referendum. | |
| However, it’s still stronger than in the aftermath of the vote; sterling hit a 31-year low below $1.20 in January 2017, before managing a small recovery. | |
| And in historical terms, it’s just one more devaluation in a series of sterling crises.... including Black Wednesday in 1992, the Wilson devaluation in 1967, the 30% devaluation by the Attlee government, the end of the gold standard.... | |
| The pound is tumbling again today. But a glance back through history shows this is hardly the first time - or indeed the biggest falls. Presenting sterling vs the dollar since 1870: pic.twitter.com/55z4wwkYXm | |
| We also have fresh evidence that all the Brexit uncertainty is weighing on the economy. | We also have fresh evidence that all the Brexit uncertainty is weighing on the economy. |
| The National Institute of Economic and Social Research has estimated that UK growth will slow to 0.4% in the current quarter, down from 0.6% in July-September. | The National Institute of Economic and Social Research has estimated that UK growth will slow to 0.4% in the current quarter, down from 0.6% in July-September. |
| That follows official data this morning, showing that UK manufacturing shrank in October, and that the wider economy only grew by 0.1% last month. | That follows official data this morning, showing that UK manufacturing shrank in October, and that the wider economy only grew by 0.1% last month. |
| OUT NOW:Our latest monthly #GDP Tracker suggests that UK economic #growth is set to slow to a quarterly rate of 0.4% in 2018Q4 from 0.6% 2018Q3 - Read here in full: https://t.co/UTIU0b4ECr | OUT NOW:Our latest monthly #GDP Tracker suggests that UK economic #growth is set to slow to a quarterly rate of 0.4% in 2018Q4 from 0.6% 2018Q3 - Read here in full: https://t.co/UTIU0b4ECr |
| Sterling’s weakness isn’t helped by confusion over whether Theresa May can actually scrap tomorrow’s vote or not! | Sterling’s weakness isn’t helped by confusion over whether Theresa May can actually scrap tomorrow’s vote or not! |
| Govt whips apparently confident they can delay the vote - but it may be when the try that the 'house erupts' - according to one MP | Govt whips apparently confident they can delay the vote - but it may be when the try that the 'house erupts' - according to one MP |
| The PM does not get to pull a vote. The House will have to vote to pull a vote. I will oppose. We need to see this deal off once and for all. | The PM does not get to pull a vote. The House will have to vote to pull a vote. I will oppose. We need to see this deal off once and for all. |
| However, the government may use parliamentary procedure to avoid the humiliation of losing a vote on whether to cancel its own vote. | However, the government may use parliamentary procedure to avoid the humiliation of losing a vote on whether to cancel its own vote. |
| My colleague Jessica Elgot explains: | My colleague Jessica Elgot explains: |
| A government source has said that there won’t be a vote on a business motion to cancel Tuesday’s vote. (See 1.38pm.) “We are replacing the business with a new statement but it isn’t a motion and therefore isn’t voteable,” the source said. | A government source has said that there won’t be a vote on a business motion to cancel Tuesday’s vote. (See 1.38pm.) “We are replacing the business with a new statement but it isn’t a motion and therefore isn’t voteable,” the source said. |
| Reminder: Our Politics Live blog has all the latest from Westminster (I’m tracking the financial reaction here...) | Reminder: Our Politics Live blog has all the latest from Westminster (I’m tracking the financial reaction here...) |
| Brexiters claim May's plan defeated after No 10 shelves key vote - Politics live | Brexiters claim May's plan defeated after No 10 shelves key vote - Politics live |
| A further burst of selling pressure is threatening to send sterling below $1.26, for the first time since June 2017. | A further burst of selling pressure is threatening to send sterling below $1.26, for the first time since June 2017. |
| As you can see, the pound has suffered a series of sickening jolts in the last few hours, since news broke that Theresa May was holding an emergency call with the cabinet. | As you can see, the pound has suffered a series of sickening jolts in the last few hours, since news broke that Theresa May was holding an emergency call with the cabinet. |
| The latest chatter in Westminster is that May plans to return to Brussels, in search of a better deal (given the torrent of criticism over the Irish backstop). | The latest chatter in Westminster is that May plans to return to Brussels, in search of a better deal (given the torrent of criticism over the Irish backstop). |
| PM expected to say that she's listened to concerns about the backstop and is heading back to Brussels. | PM expected to say that she's listened to concerns about the backstop and is heading back to Brussels. |
| Sources tell me PM will return to Brussels in an attempt to renegotiate the backstop. Statement at 3.30. | Sources tell me PM will return to Brussels in an attempt to renegotiate the backstop. Statement at 3.30. |
| .... meanwhile, the leader of the Scottish Nationalist Party, Nicola Sturgeon, has publicly called for a vote of no confidence in the government. | .... meanwhile, the leader of the Scottish Nationalist Party, Nicola Sturgeon, has publicly called for a vote of no confidence in the government. |
| So @jeremycorbyn - if Labour, as official opposition, lodges motion of no confidence in this incompetent government tomorrow, @theSNP will support & we can then work together to give people the chance to stop Brexit in another vote. This shambles can’t go on - so how about it? | So @jeremycorbyn - if Labour, as official opposition, lodges motion of no confidence in this incompetent government tomorrow, @theSNP will support & we can then work together to give people the chance to stop Brexit in another vote. This shambles can’t go on - so how about it? |
| The pound is continuing to lose ground, as traders prepare to hear from Theresa May this afternoon. | The pound is continuing to lose ground, as traders prepare to hear from Theresa May this afternoon. |
| Sterling is now down a whole eurocent against the euro at €1.1078, the lowest since September. That means the euro is worth more than 90p. | Sterling is now down a whole eurocent against the euro at €1.1078, the lowest since September. That means the euro is worth more than 90p. |
| Against the US dollar, sterling has just scraped a new 18-month low, down almost one cent at $1.263. | Against the US dollar, sterling has just scraped a new 18-month low, down almost one cent at $1.263. |
| Cable LOD, 1.2630 now, fresh 18-month low. pic.twitter.com/VLLvMlaUog | Cable LOD, 1.2630 now, fresh 18-month low. pic.twitter.com/VLLvMlaUog |
| Jaws have been dropping across the City in the last few hours. Banks, stock brokers and foreign exchange firms had all drawn up plans for a big night on Tuesday, as the Meaningful Vote took place. | Jaws have been dropping across the City in the last few hours. Banks, stock brokers and foreign exchange firms had all drawn up plans for a big night on Tuesday, as the Meaningful Vote took place. |
| Hotels were booked, caterers arranged, as traders prepared for a big all-nighter. | Hotels were booked, caterers arranged, as traders prepared for a big all-nighter. |
| Now, investors are watching Westminster to see how the saga develops. | Now, investors are watching Westminster to see how the saga develops. |
| Here’s how Brad Bechtel of investment bank Jefferies summed up the situation to clients: | Here’s how Brad Bechtel of investment bank Jefferies summed up the situation to clients: |
| The risk of a disastrous vote scenario was too high and therefore they felt it prudent to delay for now. Don’t honestly know if that is a good or bad thing. | The risk of a disastrous vote scenario was too high and therefore they felt it prudent to delay for now. Don’t honestly know if that is a good or bad thing. |
| Either the vote was going to be so bad that postponing it is a good thing, or the postponement of the vote tells you how far away from a good scenario they are. | Either the vote was going to be so bad that postponing it is a good thing, or the postponement of the vote tells you how far away from a good scenario they are. |
| Conservative MP John Redwood is speaking on Bloomberg TV now. | Conservative MP John Redwood is speaking on Bloomberg TV now. |
| Redwood - a long-standing Brexiteer - argues that the UK should leave the EU without a deal, thus saving the £39bn divorce payment: | Redwood - a long-standing Brexiteer - argues that the UK should leave the EU without a deal, thus saving the £39bn divorce payment: |
| We won’t be crashing out, we’ll be cashing in. | We won’t be crashing out, we’ll be cashing in. |
| Redwood says that a ‘clean’ Brexit would be a great opportunity to strike new trade deals.... | Redwood says that a ‘clean’ Brexit would be a great opportunity to strike new trade deals.... |
| ...but US investors aren’t convinced by the MP for Wokingham. | ...but US investors aren’t convinced by the MP for Wokingham. |
| Marc Chandler, chief market strategist at investment group Bannockburn Capital, is also on the show. He says that delaying tomorrow’s Brexit vote means more uncertainty (bad for markets). | Marc Chandler, chief market strategist at investment group Bannockburn Capital, is also on the show. He says that delaying tomorrow’s Brexit vote means more uncertainty (bad for markets). |
| People think that leaving without a deal would be bad for sterling. | People think that leaving without a deal would be bad for sterling. |
| Number 10 insiders tell me they think a second referendum is on the cards. "We’re not preparing for it and she doesn’t want it but it might be the only way. We think that’s where we’ll end up". https://t.co/cb3XslVKeW | Number 10 insiders tell me they think a second referendum is on the cards. "We’re not preparing for it and she doesn’t want it but it might be the only way. We think that’s where we’ll end up". https://t.co/cb3XslVKeW |
| Scrapping today’s vote may allow Theresa May to live another day...but it could also hasten her political end. | Scrapping today’s vote may allow Theresa May to live another day...but it could also hasten her political end. |
| So argues Mujtaba Rahman, political analyst at Eurasia Group, who points out that the PM’s last-ditch attempts to improve her deal have failed: | So argues Mujtaba Rahman, political analyst at Eurasia Group, who points out that the PM’s last-ditch attempts to improve her deal have failed: |
| She tried to limit the damage in tomorrow’s vote by seeking last-minute concessions from several EU leaders in telephone calls over the weekend. She hoped changes to the Irish backstop could be announced just before tomorrow’s vote. But the EU offered only “clarifications” - not “sweeteners” - and rejected May’s desperate pleas to reopen the Withdrawal Agreement. | She tried to limit the damage in tomorrow’s vote by seeking last-minute concessions from several EU leaders in telephone calls over the weekend. She hoped changes to the Irish backstop could be announced just before tomorrow’s vote. But the EU offered only “clarifications” - not “sweeteners” - and rejected May’s desperate pleas to reopen the Withdrawal Agreement. |
| Indeed, in Brussels this morning, the sense was that May’s last minute phone diplomacy was lacking in detailed “asks”. She also refused to share what her strategy was going to be regarding management of the Commons - both before and after the vote. | Indeed, in Brussels this morning, the sense was that May’s last minute phone diplomacy was lacking in detailed “asks”. She also refused to share what her strategy was going to be regarding management of the Commons - both before and after the vote. |
| Rahman also doubts that shelving the vote will do May much good.... | Rahman also doubts that shelving the vote will do May much good.... |
| May will likely respond to the overwhelming message from Tory MPs by seeking emergency talks in Brussels with European Commission and Council leaders before the two-day regular summit of EU leaders on Thursday and Friday. But we remain of the view that any substantive reopening of the Withdrawal Agreement is unlikely. EU leaders will not be pleased with new demands from May, especially as she only signed off on the deal a few weeks ago. | May will likely respond to the overwhelming message from Tory MPs by seeking emergency talks in Brussels with European Commission and Council leaders before the two-day regular summit of EU leaders on Thursday and Friday. But we remain of the view that any substantive reopening of the Withdrawal Agreement is unlikely. EU leaders will not be pleased with new demands from May, especially as she only signed off on the deal a few weeks ago. |
| The decision to shelve the vote is not without cost for May. It is a very unusual course during a five-day Commons debate, and makes her look weak. It will revive accusations that she is in office, not power, and add to the “end of days” atmosphere at Westminster. However, it was probably the lesser of two evils. If May had lost by a three-figure margin, she could have been forced out of office this week. | The decision to shelve the vote is not without cost for May. It is a very unusual course during a five-day Commons debate, and makes her look weak. It will revive accusations that she is in office, not power, and add to the “end of days” atmosphere at Westminster. However, it was probably the lesser of two evils. If May had lost by a three-figure margin, she could have been forced out of office this week. |
| There is also a danger that, if the EU does reopen negotiations, that some EU governments will table new demands – such as France on fishing rights in UK waters and Spain on the future of Gibraltar. | There is also a danger that, if the EU does reopen negotiations, that some EU governments will table new demands – such as France on fishing rights in UK waters and Spain on the future of Gibraltar. |
| May lives to fight another day, but her growing number of Tory critics believe it will be merely to die another day. | May lives to fight another day, but her growing number of Tory critics believe it will be merely to die another day. |
| The financial markets have been plunged into fresh upheaval today, says Simon Harvey, FX Analyst at Monex Europe: | The financial markets have been plunged into fresh upheaval today, says Simon Harvey, FX Analyst at Monex Europe: |
| “When the market thought uncertainty had finally peaked, May’s delay proves it wrong” | “When the market thought uncertainty had finally peaked, May’s delay proves it wrong” |
| Three statement from 330pm - you’d think this was a pretty clear hint that they’re going to try to pull tomorrow’s Meaningful Vote1. PM - Exiting the EU2. Leadsom - Business Statement 3. Barclay - ECJ ruling on Art 50 | Three statement from 330pm - you’d think this was a pretty clear hint that they’re going to try to pull tomorrow’s Meaningful Vote1. PM - Exiting the EU2. Leadsom - Business Statement 3. Barclay - ECJ ruling on Art 50 |
| The chaos in Westminster is hurting the stock market too. | The chaos in Westminster is hurting the stock market too. |
| Shares in house builders, who are vulnerable to an economic slowdown, are falling. Barratt Development are down 3%, Taylor Wimpey has lost 2%, and Crest Nicholson down 7%. | Shares in house builders, who are vulnerable to an economic slowdown, are falling. Barratt Development are down 3%, Taylor Wimpey has lost 2%, and Crest Nicholson down 7%. |
| Other UK-focused companies are suffering too, such as Primark-owner ABF (down 2%), ITV (down 3.5%) and the AA (down 5.5%). | Other UK-focused companies are suffering too, such as Primark-owner ABF (down 2%), ITV (down 3.5%) and the AA (down 5.5%). |
| Britain’s FTSE 250 index, which contains UK-focused companies, has fallen by 1% today. | Britain’s FTSE 250 index, which contains UK-focused companies, has fallen by 1% today. |
| The blue-chip FTSE 100, though, is up 7 points, thanks to the weakening pound (which boosts the overseas earnings of multinational companies). | The blue-chip FTSE 100, though, is up 7 points, thanks to the weakening pound (which boosts the overseas earnings of multinational companies). |
| No prizes for spotting the moment when traders heard that the Brexit vote might be off.... | No prizes for spotting the moment when traders heard that the Brexit vote might be off.... |
| Sterling is on the slide again. Down below $1.27. Lowest for 18 months or so. pic.twitter.com/CWKIZtnU08 | Sterling is on the slide again. Down below $1.27. Lowest for 18 months or so. pic.twitter.com/CWKIZtnU08 |
| This chart shows how the pound has now dropped to its lowest level against the US dollar since June 2017 | This chart shows how the pound has now dropped to its lowest level against the US dollar since June 2017 |
| City traders are scrambling to keep up with events in Westminster. The latest news is that Theresa May will address parliament this afternoon.... | City traders are scrambling to keep up with events in Westminster. The latest news is that Theresa May will address parliament this afternoon.... |
| Breaking: The Prime Minister will be making an oral statement today at 330pm titled “Exiting the European Union”. | Breaking: The Prime Minister will be making an oral statement today at 330pm titled “Exiting the European Union”. |
| Investors had been preparing for major volatility on Tuesday night, when the Meaningful Vote took place. Instead, the drama is coming a day early. | Investors had been preparing for major volatility on Tuesday night, when the Meaningful Vote took place. Instead, the drama is coming a day early. |
| Hamish Muress, currency analyst at OFX, said: | Hamish Muress, currency analyst at OFX, said: |
| The confusion over whether tomorrow’s Brexit vote will go ahead provides the market an insight into the chaos and disagreement within Downing Street. Rumours that Theresa May is set to pull tomorrow’s vote contradict those of a Downing Street spokesperson, and the fact the news was broken over a conference call instead of in a cabinet meeting speaks volumes. | The confusion over whether tomorrow’s Brexit vote will go ahead provides the market an insight into the chaos and disagreement within Downing Street. Rumours that Theresa May is set to pull tomorrow’s vote contradict those of a Downing Street spokesperson, and the fact the news was broken over a conference call instead of in a cabinet meeting speaks volumes. |
| “Many predicted that tomorrow would be the big day for any movement in the pound. However, it has already reached three-month lows against the euro and, depending on whether the vote tomorrow goes ahead, could hit lows last seen against the dollar in August.” | “Many predicted that tomorrow would be the big day for any movement in the pound. However, it has already reached three-month lows against the euro and, depending on whether the vote tomorrow goes ahead, could hit lows last seen against the dollar in August.” |