Sterling slips as UK prepares to take part in European elections
The pound slipped 0.23 per cent this morning from $1.307 to $1.304 following yesterday's confirmation that the UK will take part in the EU elections.
The 0.23 per cent drop comes after the government repeatedly said it did not want the UK to take part in the elections to the European Parliament later this month.
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However, Britain will now participate in the elections following Theresa May's decision to extend Article 50 – the mechanism that allows the UK to leave the EU – until October. The EU requires all member states to take part in the parliamentary elections.
The elections are faring up to be one of the most contentious in years, with recent polls pointing to a decisive victory for Nigel Farage's Brexit party.
A YouGov poll last week placed Farage's new party on 30 per cent of the vote, with Labour on 21 per cent and the Tories on 13 per cent.
The dire ratings for the Conservatives have piled pressure on Theresa May to resign. Yesterday she met the chair of the influential 1922 committee of backbench Tory MPs who had been demanding that she name the date of her departure.
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According to the Times, May is set to remain in office until the Tory conference in September after the Prime Minister's deputy David Lidington said the government's new deadline for agreeing a Brexit deal with Labour was 2 July.
The talks between the two main parties ended without agreement yesterday. The Labour party is pushing the government to agree to a customs union post-Brexit, which senior Tories, including the foreign secretary Jeremy Hunt, have signalled they do not favour.