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Pound falls sharply as Brexit descends into chaos

The British pound dropped sharply on Thursday after two key UK government ministers resigned, plunging the B...

Posted: Nov 15, 2018 8:30 AM
Updated: Nov 15, 2018 1:15 PM

The British pound dropped sharply on Thursday after two key UK government ministers resigned, plunging the Brexit process into deep uncertainty and hiking the risk of a chaotic rupture with the European Union.

Brexit Secretary Dominic Raab said in a statement on Thursday that he "cannot in good conscience support the terms proposed for our deal" to leave the European Union. He is the second Brexit Secretary to resign this year.

Work and Pensions Secretary Esther McVey resigned about an hour later, saying the draft deal does not honor the result of the Brexit referendum in 2016. There were more resignations at a junior level from Prime Minister Theresa May's government, and an open call from one leading Brexit supporter for May to resign.

The United Kingdom is due to leave the bloc — its biggest trading partner — on March 29, 2019.

The pound fell as much as 2% against the dollar to below $1.28 before trimming those losses slightly after May said she would fight to save her deal. Shares in UK banks declined sharply, with Lloyds (LYG) and Barclays (BCS) shedding over 4% and Royal Bank of Scotland dropping nearly 10%.

The political upheaval could derail the Brexit agreement May has painstakingly negotiated with the European Union. May said Wednesday that she had secured the support of her cabinet for the deal, but its future is now in real doubt. She faces opposition from all sides in the UK parliament.

She also warned that the alternatives to her plan were leaving the European Union without a deal, or Brexit not happening at all.

Investors are most worried about a scenario in which Britain crashes out of the European Union without having negotiated an orderly departure. That would mean new trade barriers, disruption to supply chains for food, medicines and manufactured goods, and a shock to the broader economy.

"The risk of very disorderly Brexit is increasing as we speak," said John Wraith, head of UK rates strategy at UBS.

The International Monetary Fund said in a report published Wednesday that a disorderly exit from the European Union would "lead to widespread disruptions in production and services," and severe market consequences.

"A sudden shift in investors' preference for UK assets could lead to a sharp fall in asset prices and a hit to consumer and business confidence," the IMF warned.

Over the long run, the fund said the UK economy would be 5% to 8% smaller under a "no deal scenario" than if the country had remained in the European Union.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 775686

Reported Deaths: 14025
CountyCasesDeaths
Marion1066871814
Lake572681031
Allen43500701
Hamilton37653427
St. Joseph37508568
Elkhart29882471
Tippecanoe23732232
Vanderburgh23634405
Porter19690327
Johnson19020394
Hendricks18271323
Clark13730199
Madison13719348
Vigo12949256
Monroe12691180
LaPorte12645225
Delaware11218198
Howard10832237
Kosciusko9851124
Hancock8855150
Bartholomew8343157
Warrick8216157
Floyd8128183
Grant7457181
Boone7289105
Wayne7273201
Morgan6988143
Marshall6376117
Dubois6327118
Cass6130112
Noble607391
Dearborn605878
Henry6001111
Jackson520977
Shelby514898
Lawrence5020128
Gibson471697
Montgomery464792
Clinton462755
DeKalb461485
Harrison459277
Huntington429082
Whitley421045
Steuben414561
Miami411573
Jasper403957
Knox397291
Putnam388762
Wabash373884
Adams358956
Ripley354571
Jefferson351487
White341854
Daviess3110100
Wells305981
Greene298485
Decatur294393
Posey288235
Fayette287764
Scott285458
LaGrange278873
Clay277649
Washington257638
Randolph248583
Jennings243349
Spencer240531
Fountain239050
Starke231559
Owen226759
Sullivan224143
Fulton210446
Jay204132
Carroll200623
Orange194456
Perry193139
Vermillion183444
Rush179127
Tipton174348
Franklin173935
Parke157816
Pike144034
Blackford138732
Pulaski124748
Newton124137
Benton111615
Brown106743
Crawford106716
Martin92715
Warren88715
Switzerland8568
Union73910
Ohio58711
Unassigned0429

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1132798

Reported Deaths: 20530
CountyCasesDeaths
Franklin1312911496
Cuyahoga1180592268
Hamilton830231263
Montgomery541901064
Summit491891018
Lucas43982835
Butler40324615
Stark34056941
Lorain26232511
Warren25125312
Mahoning22881614
Lake21602397
Clermont20592261
Delaware19295138
Licking16977227
Fairfield16959207
Trumbull16940493
Medina16019278
Greene15721254
Clark14439309
Portage13548219
Wood13411201
Allen12124245
Richland11870214
Miami11140229
Wayne9344228
Columbiana9282236
Muskingum9207137
Pickaway8796123
Marion8774140
Tuscarawas8756257
Erie8220166
Ashtabula7318180
Hancock7080135
Ross7070165
Geauga7032153
Scioto6887108
Belmont6261179
Lawrence6033106
Union595149
Jefferson5787162
Huron5678122
Sandusky5536130
Darke5476131
Seneca5391128
Washington5391111
Athens528660
Auglaize510587
Mercer492885
Shelby487798
Knox4678112
Ashland450198
Madison450066
Defiance444599
Fulton443275
Putnam4366104
Crawford4152112
Brown414163
Preble3988107
Logan396379
Clinton395667
Ottawa378281
Highland370768
Williams361878
Champaign351760
Guernsey334054
Jackson324954
Perry300550
Morrow298544
Fayette291350
Hardin280465
Henry279067
Coshocton275161
Holmes2735102
Van Wert254465
Gallia254150
Adams253658
Pike247137
Wyandot236557
Hocking224163
Carroll203349
Paulding181542
Meigs153940
Monroe139446
Noble138739
Harrison115738
Morgan112024
Vinton88217
Unassigned04
Fort Wayne
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Hi: 83° Lo: 56°
Feels Like: 62°
Angola
Mostly Cloudy
68° wxIcon
Hi: 81° Lo: 56°
Feels Like: 68°
Huntington
Partly Cloudy
61° wxIcon
Hi: 81° Lo: 53°
Feels Like: 61°
Decatur
Clear
62° wxIcon
Hi: 83° Lo: 55°
Feels Like: 62°
Van Wert
Clear
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Hi: 84° Lo: 55°
Feels Like: 59°
The heat and humidity builds into the region as we head into the weekend.
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