- Sky's Rigby reports 48 letters have reached 1922's Brady
- Sun's Newton Dunn denies this is the case
- Why Pound unlikely to suffer heavily on no confidence vote
Pound Sterling is under renewed pressue on headlines that a no confidence vote is to be called on Theresa May's leadership of the Conservative party.
According to newswires the 48 letters required to trigger a no confidence vote are in.
The British Pound has swung lower on the headlines.
"Sterling slipping on the 48 letter headline," says Jeremy Cook, an analyst at currency brokers World First.
"My ERG sources pretty confident now that 48 trigger been breached," Sky News reported Beth Rigby says. "Of course Sir Graham won’t announce while PM out of country - and we’ve been here before. But mood hardening."
"Sterling has slumped lower again, retreating to fresh 20-month lows on the 1.25 level against the dollar amid reports that Conservative MPs have sent the requisite 48 letters to trigger a vote of no confidence. Cable found support again on 1.250 and has pared losses but it’s being tested and as long as chaos reigns it seems likely it will go at some stage," says Neil Wilson, Chief Analyst at Markets.com.
However, Tom Newton Dunn, the well-placed Political Editor at the Sun says he is informed the threshold of 48 letters has not been reached.
"Friends of Graham Brady say he is not yet in possession of 48 letters. Just under 8 hours left of this day to go though," says Dunn.
A leadership challenge is triggered if 48 Conservatives write such letters to the chairman of the party's 1922 committee, Graham Brady.
The vote is open only to Conservative party parliamentarians, May could be toppled if 158 of her 315 lawmakers vote against her.
The party would then engage its membership to vote in a new leader.
However, if May survives the vote of no confidence she is immune to any further votes for a period of a year.
The Pound-to-Euro exchange rate is quoted at 1.1061 having been as high as 1.1102 earlier in the day.
The Pound-to-Dollar exchange rate is quoted at 1.2524 having been as high as 1.2634.
The currency had been higher for much of the day, but the gains were never enough to full undo the substantial falls suffered in Monday trade in response to a flare-up in political uncertainty that came in the wake of the government pulling the plug on the planned 'meaningful vote' on the EU-UK Brexit deal.
A leadership challenge would only likely exacerbate the uncertainty pressuring Sterling if May loses the vote of no confidence.
However, a victory for May could well provide some confidence the leadership of the country will be secure for a crucial year in British politics which would support Sterling going forward.
Political uncertainty has increased dramatically over the past 24 hours after Prime Minister Theresa May delayed the 'meaningful' parliamentary vote on the EU-UK Brexit deal and we would expect the British Pound to remain under pressure over coming days as a result.
May cancelled Tuesday's vote to allow her to gather further concession from Europe on signs the deal would simply fail. May has this afternoon met with Germany's Chancellor Angela Merkel who has since briefed a parliamentary group saying no further negotiations on Brexit will take place.
Merkel told the conservative bloc of lawmakers that efforts were being made to give Britain reassurances.
Jean-Claude Juncker, European Commission President, will meet May later in the day, and the message will likely be similar.
"I will meet Theresa May this evening in Brussels. I remain convinced that the Brexit deal we have is the best - and only - deal possible. There is no room for renegotiation, but further clarifications are possible," says Juncker.
May is looking to seek legal assurances that there will be an end-date to the backstop clause included in the Withdrawal Agreement.
"For investors, the decision to add to their shorts or take profits will depend on the signals we get from Prime Minister May's meetings," says Valentin Marinov at Crédit Agricole. "What we will be hoping for is some clarity on what assurances the EU will be willing to offer."
Foreign exchange markets are however increasing bets May's quest to Europe will ultimately come to nil: the opponents to the deal say they want the Withdrawal Agreement renegotiated to remove the Northern Ireland backstop clause, but Europe has categorically said this cannot happen.
"I have decided to call a European Council meeting on Brexit (Art. 50) on Thursday. We will not renegotiate the deal, including the backstop, but we are ready to discuss how to facilitate UK ratification. As time is running out, we will also discuss our preparedness for a no-deal scenario," says European Council President Donald Tusk.
The DUP and Conservative backbenchers opposed to the deal have maintained they will not budge in their opposition if the backstop clause is still included in the deal, therefore we see little chance of anything May brings back succeeding.
"This statement by the European Council President suggests Theresa May is utterly wasting her time in delaying the vote - in that Tory Brexiters and the DUP say there is no possibility of them backing her deal unless the backstop is renegotiated," says Robert Peston, Political Editor at ITV.
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