It’s been one of those Mondays for Theresa May.
Britain’s prime minister delayed a meaningful vote on her Brexit deal, after hours of confusion, in order to avoid a crushing defeat — and now the pound is taking a hit. Sterling had dropped 1% to 1.26 per dollar as of 2 p.m. in London (9 a.m. ET) touching its lowest level in 18 months.
Over 100 Conservative MPs had voiced their opposition to the deal, leading to May pushing the vote back to a yet unconfirmed date.
When the market thought uncertainty had finally peaked, May’s delay proves it wrong,” said Simon Harvey, FX Analyst at Monex Europe. “By delaying the vote, May has all but accepted a defeat was the likely outcome and this increases uncertainty in the market.”
The prime minister will make a statement to parliament at 15.30 GMT (10.30 a.m ET). To date, 113 Tory MPs have pledged to vote against the government, along with the vast majority of MPs from opposition parties.
“The pound looks highly susceptible to more negative news flow and further declines may be expected,” said Neil Wilson, Chief Markets Analyst for Markets.com in a note.