Finance

Pound slides as markets are spooked by shadow of Article 50 and Sturgeon’s second referendum demand

The pound has slipped by 1% as markets take fright at the prospect of Article 50 being triggered imminently, combined with a fresh threat to break up the United Kingdom.

The $1.211 level it hit represents the lowest for nearly two months and follows last night’s rejection of potential amendments to the ‘Brexit Bill’ by MP’s, which paves the way for Prime Minister Theresa May to pull the trigger on Article 50.

The unelected House of Lords had called for a ‘meaningful vote’ on the outcome of the Brexit negotiations and guarantees for EU citizens already in the United Kingdom to be put in place, before the start of Brexit talks.

The House of Commons last night voted down proposed amendments to the ‘Brexit Bill’ that the Government successfully argued would undermine the UK’s negotiating position

The Government argued that such stipulations would weaken the UK’s negotiating position and collectively MPs backed this viewpoint last night, effectively giving May the green light to proceed.

The sterling slide is also in reaction to yesterday’s demands from First Minister of Scotland Nicola Sturgeon for a second referendum on Scotland breaking away from the UK.

Sturgeon has called for the vote to be held in either 2018 or 2019, meaning it could fall just as Brexit negotiations between the UK and EU are coming to a head.

Scottish First Minister Nicola Sturgeon has called for a second referendum on Scotland leaving the UK to take place in 2018 or 2019

‘The reason [for the fall in the pound] is that this spells only one thing for investors; that [Theresa May] is heading towards hard Brexit negotiations with an attitude that she has nothing to lose,’ said analyst Naeem Aslam of Thinkmarkets.

‘The biggest fear on the street is what her EU partners will say and how they are going to treat this matter given that Brexit is about to become a reality.’

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