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Battle lines drawn as Boris threatens snap election

The UK may face an imminent general election as Boris Johnson rejects the possibility of another Brexit deadline extension.

Centtrip: Tories, turkeys and thanksgiving

Boris Johnson yesterday, 2 September threatened to call a general election to stave off rebellion in his party, raising the stakes over Brexit.

Up to 20 Conservative members of Parliament (MPs) today could join forces with Labour and other parties to pass an emergency law to seize control of the Brexit process from the prime minister to stop Britain from leaving the European Union without a deal. Johnson reiterated he would not seek another “pointless” extension to the Brexit deadline and threatened to purge Tory rebels from the party.

If the anti-no-deal group holds firm, Johnson, who said the move would “wreck” his negotiating strategy as EU leaders would think that Parliament would halt Brexit, is likely to face defeat. The prime minister’s allies believe the vote today will be “tight”.

If defeated today, the government will publish a motion paving the way for an early election, which Johnson would then try to trigger tomorrow, 4 September.

What is likely to be a messy exit from the EU will weaken the Pound. But it could also roil other currencies as investors adjust their positions to exit trades in riskier assets.

Sterling had its biggest decline in more than three weeks yesterday, having dropped by 0.8 per cent. The UK currency is being ditched amid the rising political risk and likelihood of a no-deal Brexit. Having been trading at $1.1972 earlier today, its lowest since October 2016, the Pound will remain under pressure ahead of the vote later today.

The Euro fell to $1.0954 in early trade today – its lowest since May 2017 – after a survey published on Monday showed European manufacturing contracted for seven straight months.

In the offshore market, the Yuan traded at 7.1940 per Dollar, close to its lowest level since international trading in the currency began in 2010. The Yuan weakened after Bloomberg News reported that Chinese and US officials were struggling to agree a schedule for the upcoming round of talks set for this month.

Elsewhere in currency markets, the Dollar Index rose 0.27 per cent to 99.082, reflecting weakness in other major currencies. US financial markets were closed yesterday for a public holiday.

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