Sterling hits fresh four-month low as Tories turn on May’s Brexit deal

The pound has fallen to a fresh four-month low today as political crisis over Brexit mounts in Westminster.

Read more: May loses support for Brexit deal after offering vote on second referendum

Sterling had fallen 0.4 per cent against shortly before 12.30pm to buy $1.265, its lowest price since the start of January.

Investors sold the currency on the back of the latest escalation of Brexit tensions that saw many Conservative MPs round on Prime Minister Theresa May after her pledge to give parliament a vote on a second referendum.

The pound jumped yesterday after May laid out her new-look deal in a speech, as investors warmed to the prospect of a second vote and the possibility of Britain remaining in the European Union.

However, hopes were soon dashed when it became clear that May’s latest version of the withdrawal deal had little hope of passing. Sterling ended the day 0.1 per cent lower against the dollar.

Former Tory leader Iain Duncan Smith called the PM’s proposals, which included letting MPs decide what customs arrangement the UK should have with the EU, a “bad buffet of non-Brexit options”.

The pound had also fallen 0.4 per cent against the euro shortly before 12.30pm, buying €1.133.

Joshua Mahony, senior market analyst at IG, said: “Theresa May seems to have an impossible task as she aims to win over support for the deal. However, with Theresa May leaving, we see the chance of a no-deal Brexit rise, sending the pound lower.”

“The support for Nigel Farage in the European elections certainly highlights the possibility that the whole political picture could be reshaped until we see Brexit executed,” he said.

Read more: May says MPs will get a vote on a second Brexit referendum

A weaker pound looked to be helping the FTSE 100 by increasing the competitiveness of companies’ goods and services. It had risen 0.2 per cent to 7,346.8 shortly before 12.30pm.