Abu Dhabi, UAEMonday 23 September 2019

British pound falls to 18 month low as Theresa May calls off parliamentary vote on Brexit

The pound fell half a per cent against the dollar as reports of Mrs May's decision emerged

An anti-Brexit protester holds balloons opposite the Houses of Parliament in London. Reuters
An anti-Brexit protester holds balloons opposite the Houses of Parliament in London. Reuters

The British pound sterling fell to its lowest level since June 2017 on Monday on media reports British Prime Minister Theresa May would cancel a parliamentary vote on her Brexit deal.

The pound slid half a per cent to $1.2656 after the BBC's political editor reported that two cabinet sources said Mrs May was pulling the vote, scheduled for Tuesday. It also extended its losses versus the euro, trading down 0.7 per cent at 90.18 pence - its weakest since early September.

Parliament was due to hold a vote on Mrs May's deal on the terms of the UK's withdrawal from the EU on Tuesday, which was seen as her biggest legislative challenge yet.

Mrs May's apparent decision not to hold the vote indicates she does not expect her deal to pass through the House of Commons, adding fresh credence to calls for a vote of no confidence or for her resignation.

The deal has faced strong criticism from both leave and remain leaning MPs, with the former saying it did not go far enough and the latter saying it goes too far.

Britain's exporter-heavy FTSE 100 index climbed as the pound fell, up 0.1 per cent by 1150 GMT. The more domestic FTSE 250 index tumbled, down 1 per cent as the reports Mrs May could delay the parliamentary vote triggered renewed uncertainty.

Perceived safe-haven British government bonds rallied on the news, with 30-year yields dropping as much as 7 basis points on the day to a three-month low of 1.759 per cent, while five-year yields fell to their lowest since January at 0.827 per cent.

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Updated: December 10, 2018 06:24 PM

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