(12 DECEMBER 2018)DAILY MARKET BRIEF 2:UK PM under threat as vote of no confidence is triggered
Following Prime Minister Theresa May's postponement of the final vote on her Brexit deal on Tuesday, rebel members of the Tory party have now decided to challenge her leadership. The rebels have the required 48 votes of party members to trigger a vote of no confidence by all 315 Conservative MP between 6 and 8 PM GMT today. A total of 158 votes would force Theresa May to step down and open the door to a party leadership contest.
Because Parliament would need weeks to find an agreed candidate, considerable time and effort would be spent on a doubtful cause since a new leader would face the same issues going forward. Under such circumstances, it seems improbable that the rebel Tories will be able to gain the support of 158 MPs.
Accordingly, despite a bounce back during this morning's trading session of the pound, we expect further volatility on the forex market. GBP/USD is currently trading at 1.2539, heading along 1.25 short-term.
