(13 DECEMBER 2018)DAILY MARKET BRIEF 2:No confidence in the pound

Although UK Prime Minister May survived a vote of no confidence yesterday, which boosted the cable 1.58%, the pound is still in negative territory week-to-date (-0.33%). The March 2019 Brexit deadline remains, and the UK parliament is likely to reject the current withdrawal agreement. The only upside for sterling would be announcement of a better deal after May’s next meeting in Brussels: this remains highly unlikely.

Yesterday’s vote showed the chaos of the Conservative Party. 117 votes against May lost to 200 supporters. May had no break: she headed to Brussels to get a better deal on the Irish backstop, particularly the clause stating that a hard border between Northern Ireland and the UK would be triggered if no deal is agreed between the UK and the EU.