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Pound volatile in further Brexit turmoil

Pound volatile in further Brexit turmoil

  • 3 September 2019
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  • Brexit
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The pound has made gains on currency markets after Prime Minister Boris Johnson lost his majority in the House of Commons.

Tory MP Phillip Lee's defection to the Liberal Democrats lifted sterling to above $1.20 and €1.10.

Earlier, the pound had touched its lowest level since October 2016 before recovering to erase the day's losses.

Rebel Tories and Labour MPs want to pass a bill to stop the UK leaving the EU on 31 October without a deal.

No 10 has threatened a snap general election on 14 October if MPs succeed in seizing control of Commons business.

Addressing Parliament on Tuesday afternoon, Mr Johnson that if they managed to block a no-deal exit, it would "destroy any chance of negotiating a new deal".

The bill would force the prime minister to ask for Brexit to be delayed until 31 January, unless MPs had approved a new deal, or voted in favour of a no-deal exit, by 19 October.

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Under Mr Johnson, the government has toughened its stance on a no-deal Brexit, which it has said is "now a very real prospect".

Excluding the so called "flash crash" in October 2016, when the pound briefly fell sharply to $1.15 against the dollar before rapidly rebounding, the pound has not traded regularly below $1.20 since 1985.

The pound was trading at about $1.50 against the dollar before the EU referendum in June 2016.

Pound v Dollar