Following an unstable start of the week, this morning, Sterling crawled back up above $1.25 against the Dollar.
Tory Brexiteers are becoming more and more confident that they have enough backing to spark a no-confidence vote in Theresa May.
Shortly after reports that Theresa May faces a no-confidence vote, Sterling dropped back below the $1.25 mark.
Theresa May gave a speech outside 10 Downing Street after a vote of no-confidence in her leadership was prompted saying: “I will contest that vote with everything I’ve got.
“A change of leadership in the Conservative Party now will put our country’s future at risk and create uncertainty when we can least afford it.
“A new leader wouldn’t be in place by 21 January legal deadline [for the parliamentary vote on the Brexit agreement], so a leadership election risks handing control of the Brexit negotiations to opposition MPs in Parliament.
“The new leader wouldn’t have time to renegotiate a withdrawal agreement and get the legislation through parliament by the 29 March, so one of their first acts would have to be extending, or rescinding, Article 50, delaying or even stopping Brexit.”
Prime Minister May will need the backing of 50% of MPs in order to win the vote of no confidence- 173 MPs publicly backed the PM’s Brexit deal.
President May needs the backing of 158 -50% of 316 – of Conservative MPs to win the confidence vote and he has counted that 173 of them have stated publicly that they backed the Prime Minister’s Brexit deal.
David Cheetham, Chief market analyst at XTB said: “Despite [tonight’s vote of no confidence in the Prime Minister] the pound is actually edging higher on the day as it looks to recover from the sizable declines so far this week. Even though her job is on the line, the vote could in fact end up delivering some positive news, not just for PM May, but also for the pound. Given the time it has taken to reach this point it is pretty clear that there’s not overwhelming support to oust the PM and should [Mrs] May survive this contest by a sizable margin then it will likely serve to embolden her position and could well spark a recovery in the pound following the recent declines.”
Conservative MPs will vote from 6pm to 8pm today and if PM May wins the vote, she cannot be challenged for another year.