Pound settles at near two-week lows after volatile night in parliament

Edmund Heaphy
Finance and news reporter
Prime minister Boris Johnson speaks in the House of Commons on Wednesday, a day after his suspension of parliament was ruled unlawful. Photo: House of Commons/PA/Getty

The pound hovered at near two-week lows on Thursday after a night of tumult in parliament that saw prime minister Boris Johnson accuse MPs of attempting to “sabotage” Brexit.

During a highly charged debate, Johnson said he would not abide by the terms of the law, known as the Benn Act, that requires him to seek a Brexit extension from the EU before 31 October.

The value of the pound, which fell by more than 1% on Wednesday, stayed below $1.24 (GBPUSD=X) on Thursday morning.

MPs returned to Westminster on Wednesday after the UK Supreme Court ruled that Johnson’s suspension of parliament was unlawful.

But Johnson repeated his criticisms of the court ruling and accused MPs of “surrender”, “sabotage”, and “betrayal.”

Warned by the opposition to moderate his “inflammatory” language, he sparked controversy when he said that getting Brexit done was the best way to honour Jo Cox, the Labour MP who was murdered mere days before the 2016 referendum.

The pound was down slightly on Thursday, close to near two-week lows. Chart: Yahoo Finance

Noting that she was standing under a shield that remembered Cox, Labour MP Paula Sherriff said “many of us in this place [are] subject to death threats and abuse every single day.”

“Let me tell the prime minister that they often quote his words — ‘surrender act’, ‘betrayal’, ‘traitor’ — and I for one am sick of it. We must moderate our language,” Sherriff said.

“I’ve never heard such humbug in all my life,” Johnson responded.

Asked by Labour MP Ian Murray whether he would comply with the Benn Act, Johnson simply responded “no.”

The pound was “under pressure” as parliament returned from the suspension, said Michael Hewson, chief market analyst at CMC Markets UK, in a note.

It “pretty much picked up where it left off, with MPs giving full vent to a range of emotions, some of them quite ugly,” he said.

“If last night’s events are any guide, getting consensus for any kind of deal is going to be a very big ask, and probably impossible without a change of MPs, as both Labour and Conservative party MPs traded insults, with prime minister Johnson goading Labour leader Jeremy Corbyn into calling a vote of no confidence in his government.”