Since withdrawing the vote on her Brexit agreement, Theresa May has faced backlash and tonight will see MPs vote on whether the Prime Minister can retain her position. The letters of no confidence have been pouring into the 1922 Committee since the Chequers agreement was put on the table, and now enough have been received for a vote of no confidence to go ahead. A minimum of 48 letters are needed to call a vote of no confidence, a total of 15% of Conservative MPs. The ballot will take place tonight between 6-8pm, and the Pound could be susceptible to sharp fluctuations in the run-up, as well as to the results.
The British Prime Minister will now need a minimum of 158 Tory supporters to retain her title, and then her position would be safe for another 12 months. If a significant proportion of the Conservative Party vote against Theresa May, but don’t quite achieve enough support to force her to step down, she may choose to resign herself.
It appears that if a Tory leadership contest takes place, the UK would need to extend its Article 50 notification to delay its departure from the EU. Theresa May will answer MPs questions at midday today, as well as chairing a Cabinet meeting regarding a no-deal Brexit.
As a result of this political disruption, market volatility could be significant and more uncertainty in the situation could put further pressure on the Pound. Sterling slipped to 20-month lows of 1.24 versus the US Dollar in earlier trading but has recovered to 1.25 following Theresa May’s comments suggesting she will contest the vote of no confidence, saying ‘I stand ready to finish the job’.
The Pound could become increasingly volatile as the session goes on amid political debates and the outcome of the vote. If you’d like to speak to an experienced currency expert about your money transfers, or discuss how you can protect your funds from further losses, contact your Dealer today, or call us on +44 (0)20 7989 0000.
Interbank levels so far today (correct as of 11:13am):
GBP/USD – 1.2476 – 1.2552
GBP/EUR – 1.1025 – 1.1079
GBP/AUD – 1.7290 – 1.7404
GBP/CAD – 1.6701 – 1.6790
GBP/NZD – 1.8125 – 1.8313