Sterling slides as vital Brexit vote deferred

The pound slid to a 20-month low as Theresa May was forced to defer a parliamentary vote on her Brexit deal.

The latest humiliation for the Prime Minister sent the pound to its lowest level since April 2017 versus the US dollar, at $1.251, a fall of 1.6 per cent on the day. Against the euro, the battered British currency shed 1.2 per cent to hit €1.103.

The vote was expected to go down to a heavy defeat and in a statement to MPS late in the day, May said she would defer it and step up preparations for a possible no-deal Brexit.

David Cheetham, chief market analyst at XTB, said: “The move may have spared an embarrassing parliamentary defeat for the PM but it will no doubt see those calls for her to be replaced grow ever more vociferous.

“The negative reaction in the markets is more likely due to what it means for her position rather than the failure to win the vote, as it now seems increasingly likely that a long-touted leadership challenge will ensue.”

May is expected to plead with Brussels for an amendment to her withdrawal agreement, in an effort to ensure it is passed in parliament.

A disappointing set of figures showing Britain’s economy has suffered a slowdown also dragged on the pound. Over the three months to October, GDP rose 0.4 per cent, compared with 0.6 per cent in the three months to September, according to the Office for National Statistics.

The FTSE 100 closed down 0.83 per cent at 6,721.54. Housebuilders Persimmon and Barratt Developments were among the biggest fallers on the top flight, shedding 85p and 23.9p, to 1,861p and 439p, respectively.