Pound sinks on uncertainty surrounding PM May
The British pound sank on Thursday as investors fretted over Prime Minister Theresa May's political future one day after a "shambolic" speech to the Conservative Party's annual conference. (AFP/PAUL ELLIS)
LONDON: The British pound sank on Thursday (Oct 5) as investors fretted over Prime Minister Theresa May's political future one day after a "shambolic" speech to the Conservative Party's annual conference, analysts said.By about 1515 GMT, sterling had dived to a one-month low at US$1.3122.Earlier, the European single currency had hit a three-week pinnacle at 89.33 pence per euro."After Theresa May's speech at the Tory party conference on Wednesday, there are rumours that she will be asked to step down by her own party," said City Index analyst Kathleen Brooks."The prospect of a leaderless UK in the middle of the Brexit process, or even worse, a Prime Minister Boris (Johnson), are right to unnerve sterling traders."She added that the market "seems to be ignoring some fairly solid economic data, progress in the Brexit talks, and a weaker dollar and euro, in favour of politics".
May's conference speech dominated Thursday's newspapers, which had sympathy for her bad luck but bleak warnings about what the string of misfortunes signalled for her leadership.The premier was hoping to use the keynote speech to reassert her authority following a dismal election showing.However, she was interrupted by a comedian handing her a fake notice of unemployment, before succumbing to a persistent cough in front of a collapsing set."Sterling is coming under pressure again ... following speculation that Theresa May's position is increasingly under threat following yesterday's shambolic speech," added Oanda analyst Craig Erlam.
"A change of leadership so soon after the election and just as Brexit talks appear to be making some progress may seem like a ludicrous idea - but a leadership challenge has been brewing since the disastrous election campaign."