Pound claws back from 3-year low after Johnson's defeat in Brexit vote

Pedro Gonçalves
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Pound claws back from 3-year low after Johnson's defeat in Brexit vote

The pound has rebounded after investors felt relieved following the defeat of Boris Johnson in Parliament on Tuesday night as a rebel alliance of MPs seek to block a no-deal Brexit.

The pound, which has lost nearly 20% of its value since the UK voted to leave the European Union in 2016, fell to a three-year low of $1.1959 but then rebounded after Johnson lost his working majority in the British parliament on Tuesday following the defection of one of his Conservative Party MPs.

The value of the pound rose 0.48% to 1.214 against the dollar while it jumped 0.35% to 1.105 against the euro.

With the UK parliament plunged into a historic crisis, it is essential for domestic UK investors and international investors with exposure to UK assets to take steps to safeguard their assets"

Traders in London said heightened uncertainty was making investors panic, as the battle over Brexit reaches a crescendo this week.

Many fear that the UK will either crash out of the European Union on October 31 without a transitional deal or face an election that would generate more unpredictability when the economy is already struggling.

MPs have taken control of parliamentary business and now hope to pass a law to force Boris Johnson to delay Brexit unless there is a deal approve by parliament.  In the event, 21 Conservative MPs defied the whip and voted for the motion and have been kicked out from the party. These rebel MPs include many heavy hitters such as former chancellors and cabinet ministers. 

Among those jettisoned rebels are Philip Hammond who - until 24 July - served as chancellor, former justice secretary David Gauke, Winston Churchill's grandson Sir Nicholas Soames, and Rory Stewart, who recently stood against Boris Johnson to be the party leader.

The prime minister said the legislation should be called "Jeremy Corbyn's surrender bill", because it would force him to go on bended knee to Brussels to seek an extension to the Article 50 exit process, with the EU laying down the terms.

Boris Johnson is to call for a general election if he is forced to request an extension to the 31 October deadline. He said: "An election will be the only way to resolve this if MPs vote for a Brexit delay."

Johnson has tabled a motion in Parliament seeking approval for an "early general election" but has not specified a date. The government wants to hold an election on 15 October, two days before a crucial EU summit in Brussels, according to the BBC.

But unless two thirds of MPs back the move for an election it cannot be called - which looks unlikely, given Labour's opposition.

Labour has said the bill taking the no-deal option completely "off the table" needs to be passed before his party would support the call for a general election.

Shadow Brexit Secretary Sir Keir Starmer told BBC Radio 4's Today that Labour wanted a general election but "on its terms not Boris Johnson's terms".