The pound has fallen to its lowest in almost three years against the dollar as political uncertainty over Brexit intensifies.
Sterling plunged below $1.20 on Tuesday – the lowest since a flash crash low of $1.15 in October 2016 – as MPs geared up for a showdown in parliament over the possibility of a no-deal Brexit
A group of opposition MPs – joined by a handful of rebel Conservatives – are expected to introduce legislation in the Commons that could block the option of the UK leaving the EU without a deal on October 31.
Meanwhile, the looming possibility of a snap election is also thought to have added to the fall in the pound, which was trading at around $1.50 before the EU referendum in June 2016.
There was less of an effect on the exchange rate against the euro, which fell 0.2% to a two-week low of 91.33 pence.
In a speech outside of Number 10 on Monday night, Boris Johnson urged MPs against voting to block no-deal, saying it would “plainly chop the legs out from under the UK position”.
“I don’t want an election and you don’t want an election,” the PM said.
“Let us get on with the people’s agenda, fighting crime, improving the NHS, boosting schools, cutting the cost of living, and unlocking talent and opportunity across the entire United Kingdom.”
It has been reported that Tory MPs have been threatened with expulsion from the party and deselection at the next election if they back the bill blocking no-deal – a move that could wipe out the government’s already extremely fragile majority.