Pound slides to worst ever run against euro as Theresa May 'prepares to quit' amid Brexit chaos

Ben Chapman

The pound fell sharply against the dollar and euro on Thursday as speculation mounted that Theresa May is about to resign as prime minister after her latest attempt at gaining support for a withdrawal agreement lay in tatters.

Sterling fell to €1.13 on Thursday morning extending its worst run against the single currency since it started trading in 1999. Sterling has fallen for 13 consecutive days falls against the euro and was on track to extend that record on Thursday after another 0.4 per cent fall by mid-morning

The pound also slipped a quarter of a cent down against the dollar, taking its losses over the past three weeks to 3 per cent.

Traders priced in an increased likelihood of the UK crashing out of the EU without a deal as Ms May failed to quell a ministerial mutiny over her revised deal and Commons leader Andrea Leadsom quit late on Wednesday.

Other ministers are expected to follow Ms Leadsom - the most prominent Brexiteer in the cabinet - out of the door.

Both the Tories and Labour face a drubbing in European parliament elections, with the Liberal Democrats and the Brexit Party predicted to capitalise.

Dean Turner, UK economist as UBS Wealth Management, forecast that the pound could crash to as low as $1.15 against the dollar and close to parity against the euro in the event of a no-deal Brexit. He warned investors not to be complacent about the prospect.

“Despite mounting public impatience over the process, many top officials and lawmakers remain fearful of the economic damage from a no-deal exit,” said Mr Turner.

“Lingering uncertainty would likely cause firms to delay investment, and keep sterling under downward pressure.”

“A UK decision to remain an EU member would likely cause a swift rebound in sterling, which we believe is undervalued relative to its purchasing power parity level of around USD 1.58.”