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Brexit

Pound plunges as UK ministers quit over Theresa May’s Brexit deal

  • Sterling slid the most in more than 17 months after ministers quit
PUBLISHED : Thursday, 15 November, 2018, 7:14pm
UPDATED : Thursday, 15 November, 2018, 7:14pm

The pound plunged against the dollar and euro Thursday after ministers, including Britain’s Brexit secretary Dominic Raab, quit in protest against a draft deal to exit the EU.

The latest market gyrations came as the nation’s business sector gave a lukewarm verdict to the proposed agreement, and amid worries that British Prime Minister Theresa May could soon face a no-confidence vote.

The pound was worth around US$1.2780, compared with almost US$1.30 late Wednesday. The euro meanwhile jumped to 88.26 pence, a gain of 1.3 per cent.

London’s FTSE 100 index of major companies meanwhile dipped 0.1 per cent to 7,026.17 points.

Losses were capped by the weaker pound, which boosts London-listed multinationals whose earnings abroad are converted back into sterling.

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“There’s been a sharp move lower in the pound … after Brexit minister Raab announced his resignation,” said XTB analyst David Cheetham.

May had been preparing to sell her Brexit deal to parliament, boosted by news that Europe is preparing a rapid summit to sign off on the agreement.

However, her efforts unravelled spectacularly as Raab resigned along with work and pensions secretary Esther McVey and junior Northern Ireland minister Shailesh Vara.

Raab’s resignation “is a major blow for May … with her position now growing increasingly tenuous”, Cheetham warned.

“It now seems probable that a vote of no confidence will be tabled, with some reports stating that the requisite 48 letters will be sent by lunchtime.”

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