Pound sterling was hit by the fallout from Theresa May’s speech
The exchange rate has fallen to €1.118 due to political fears and disappointing UK data.
Sterling was hit by the fallout from Theresa May’s speech at the Conservative Party conference on Tuesday.
The exchange rate has continued to slide in the wake of the address, amid increasing speculation the Prime Minister could be ousted by her own party.
Uncertainty surrounding the UK’s leadership has rattled investors, causing the pound to crash away from last week’s high of €1.141.
Pound euro exchange rate: Sterling has tumbled as speculation mounts Theresa May could be ousted
Further weighing on the exchange rate was the release of disappointing car sales figures out of the UK.
TorFX currency analyst Laura Parsons said: “After enjoying a steadier footing on Wednesday the GBP/EUR exchange rate declined again on Thursday, with the pound weakened by political concerns and falling UK car sales.
“Rumours that Prime Minister Theresa May could be ousted from her position reduced demand for Sterling and GBP/EUR was left trading in the region of €1.119.”
The Prime Minister was said to be “extremely distraught” following her speech this week, which was blighted by coughing fits and a TV prankster’s stunt.
Pound euro exchange rate: Theresa May’s speech was hampered by her cough and a prank
Former Tory chairman, Grant Shapps, has stated that he is part of a 30 strong group backing the informal dismissal of Mrs May and demanded she call a leadership election – the bid includes five former Cabinet ministers.
Mr Shapps said: “I think she should call a leadership election.”
The former chairman also told BBC Radio 5 Live that “the writing is on the wall” after Mrs May’s speech on Wednesday.
The pound has been boosted in recent weeks by solid economy data and expectations the Bank of England could soon raise interest rates.
Pound euro exchange rate: Sterling has slipped to €1.117
But Brexit negotiations and the potential for a change in leadership are now sending fears through markets.
The political turmoil from a change in leadership would likely deal the pound a heavy blow.
Fresh data out of the UK today could send the exchange rate spiralling further if figures fail to impress.
Ms Parsons said: “If today’s UK’s housing data falls short, the pound could dip further before the weekend.”