Sterling takes a pounding as Brexit talks break down
Sterling hit a four-month low today as talks broke down between Labour and the Tories over the future of Brexit.
The pound reached as low as $1.276 against the dollar, while losing 0.3 per cent against the euro at 87.55p.
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The Labour Party today confirmed that its talks with the Conservatives over how to deal with Brexit had fallen apart.
The party’s leader, Jeremy Corbyn, blamed weakness in the government, saying that Prime Minister Theresa May could not guarantee her successor would stick to a deal.
May, meanwhile said Labour could not reach a clear position on Brexit: “We haven’t been able to overcome the fact there isn’t a common position in Labour about whether they want to deliver Brexit or hold a second referendum which could reverse it.”
Monex Europe analyst Simon Harvey said: “The Brexit bellwether that is the pound shows how bleak the current political situation is in the UK. Today’s sterling move comes as the final layer of support, in the form of cross-party talks bearing fruit, is stripped away.”
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“The heightened political anguish continues to suppress sterling. The recent move in euro to pound is quite telling about how entangled the pound is with political uncertainty, especially given the general depreciation of the euro recently.”
He added: “How far sterling continues to fall depends on the decisiveness of the Tory party in replacing May and whether that brings a heightened threat of a general election.”