money-pound

The value of the pound has fallen again as MPs face a crucial vote of the future of Brexit and rumours of a general election. 

Against the euro, sterling fell below €1.10 while it dropped under $1.20, its lowest level for three years. Prior to the EU referendum, the pound was trading at around $1.50.

The pound has dropped in value consistently in recent months as the prospect of a no-deal Brexit becomes more likely.

Today, MPs are set to vote on a bill that will prevent the government from leaving the EU without a deal and force it to seek an extension. Several Conservative MPs are expected to rebel against the government whip and vote with the opposition, a move that has prompted Prime Minister Boris Johnson to threaten to remove them from selection at the next general election.

And that’s something that could happen sooner rather than later, with the Prime Minister expected to put forward a motion to hold an election on 14 October.

Speaking to the BBC, Jane Foley, senior currency strategist at Rabobank, said: “Currencies, as a rule, do not like uncertainty. The idea is that there could of course be a no-deal Brexit, which investors do not like. They do not like the idea of the uncertainty or the potential chaos that that could bring.

“If the members of Parliament do manage to block a no-deal Brexit at the end of next month, then that is likely to push sterling up.

“That said, political uncertainty and a general election will likely push sterling down.

“Sterling will remain a very vulnerable currency.”