Pound sours over UK chancellor threatening to quit and Duncan resignation

Lianna Brinded
Head of Yahoo Finance UK
A pound coin is placed on broken glass and British flag in this illustration picture taken January 28, 2019. Photo: REUTERS/Dado Ruvic

The pound against the US dollar (GBP/USD) fell further into negative territory in on Monday after Britain’s chancellor Philip Hammond said on TV that he will quit if Boris Johnson becomes prime minister while Sir Alan Duncan quit as a Foreign Office minister.

While sterling fell a little further after the Duncan news, keeping the level hovering around $1.24 mark, which is significantly down from the $1.33 high year-to-date.

Chart: Yahoo Finance

Over the weekend, Britain’s finance minister Hammond, who is a staunch Remainer, said on the BBC if Brexiteer Johnson becomes prime minister then he has no option other than to resign.

“That is not something I could ever sign up to. It's very important that a prime minister is able to have a chancellor that is closely aligned with him in terms of policy,” he said.

Johnson is currently the frontrunner to take the UK’s top job and prominently campaigned for Brexit. He also, during his time as foreign secretary under Theresa May’s reign, pushed for no-deal Brexit.

“Boris Johnson has remained favourite to win, in spite of the talk of pulling Britain out of the EU with or without a deal. For that reason, a Johnson victory would continue to be considered a Pound negative outcome,” said FX Empire.

Britain's Foreign Secretary Boris Johnson (L) and Chancellor Philip Hammond leave number 10, Downing Street. Photo by Leon Neal/Getty Images

Current foreign secretary Jeremy Hunt is also in the running to become PM. Hammond said if Hunt won the leadership race, the situation "might be more complicated."

He said Hunt's position regarding a no-deal Brexit was "more nuanced," but said he would support either man in their pursuit of a new Brexit deal, but it would not be possible to agree this before Brexit is scheduled to happen on 31 October.

"A genuine pursuit of a deal will require a little longer,” he said.

Around 160,000 Conservative party members have until 5pm local time today to cast their ballots for the next leader and the winner is due to be announced Tuesday.