The pound shrugs off defeat for Mrs May

STERLING remained stable yesterday in the face of 48 hours of turmoil in Westminster over Brexit.

Trading opened yesterday as MPs were preparing for a confidence vote in Theresa May’s government after she suffered a crushing defeat on her Brexit deal on Tuesday evening.

But sterling was resilient, trading broadly flat versus the US dollar and euro at 1.285 and 1.127 respectively.

“Sterling spent the day acting as if it didn’t have a care in the world,” financial analyst Connor Campbell said.

Bank of England governor Mark Carney claimed the pound’s performance signalled that the market hopes Brexit can be delayed.

He told MPs on the Treasury Select Committee that financial markets now viewed the prospect of the UK leaving the EU without a deal as declining.

Mr Carney, who has faced criticism from

‘Sterling acted as if it didn’t have a care’

senior Brexiteers over his bleak warnings about leaving the EU, said the market is “waiting” to see how the process develops.

City Index analyst Fiona Cincotta said: “Trades are taking an optimistic view of Theresa May’s historic defeat.

“The deadlock is so apparent in Parliament and the result so dire that traders view the chances of a no-deal Brexit as greatly reduced. Extending Article 50 and/or a softer version of Brexit, or no Brexit at all are the most viable options now, in the eyes of the market.”

Jeremy Stretch of CIBC Capital Markets said: “The probability of a no-deal has diminished while the chances of a delay in Article 50, a second referendum or even, at the margin, no Brexit at all, have all increased. The consequence of those scenarios has encouraged sterling to rally despite the PM suffering the worst parliamentary result in a century.”