Pound rallies but market still has the jitters

The pound has steadied after enduring its biggest one-day decline for more than two years amid Thursday’s Brexit deal chaos.

But stocks on the London market finished yesterday in the red as investors were braced for more turbulence amid speculation Prime Minister Theresa May may face a confidence vote.

Sterling edged 0.5% higher to over 1.28 US dollars, having tumbled on Thursday after a raft of key ministerial resignations – including Brexit Secretary Dominic Raab – sparked the steepest sell-off since the October flash crash in 2016.

But the pound was 0.15% down against the euro to under 1.13 euros.

The FTSE closed 24.13 points lower at 7,013.88.

Financial and banking stocks and housebuilders remained under pressure, however.

Among stocks on the FTSE 100 Index, Royal Bank of Scotland fell another 3%, while peers Lloyds Banking Group and Barclays dropped 1.7% and 0.9% respectively

Britain’s biggest banks were summoned for a call with City regulators on Thursday over market turbulence caused by the Brexit deal turmoil.

It is understood major UK banks were asked for their feedback on the market reaction, with the Financial Conduct Authority saying it was having “regular contact” with firms and would “continue to engage with them”.

Housebuilders were also among the worst affected stocks on Thursday and continued to suffer falls. Persimmon and Barratt Developments both fell by more than 2% yesterday.