The pound sterling fell on Tuesday to the lowest level since the ‘flash crash’ of 2016, amid growing speculation that the UK is heading towards a general election, which increased chaos over Brexit.
As of 07:45 GMT, the sterling fell 0.83 percent against U.S. dollar to trade at $1.1961 the lowest level since October 2016, extending its decline for a fifth straight session.
The decline continued as politicians continued to writ over Brexit and speculations that the new Prime Minister was prepared to call for an election if MPs, including Conservative rebels, won a parliamentary attempt to block the Brexit scenario.
PM Boris Johnson has summoned his ministers to a meeting, according to The Sun newspaper, as Johnson intends to call early elections within five weeks, before leaving the European Union, if Parliament rejects his exit plan.
Johnson, however, said that the chances of a deal to leave the EU are increasing, stressing that the UK will not delay its exit from the bloc again.
Coalition of opposition MPs are planning legislation to prevent secession from the bloc without agreement, fearing that it would be destructive.
The pound came under pressure on Monday after a report showing that U.KJ. manufacturing activity scored a contraction of 47.4 in August, the lowest reading in seven years, compared to 48.0 in July.
Another report released today showed that U.K. builders suffered the sharpest fall in new business since March 2009, dragging the construction PMI down to 45.0 in August.
In the same context, Markit Statistics Center data showed yesterday that August witnessed the lowest growth in seven years, which can be attributed to their Brexit crisis and slowing global growth, reducing the chances of economic recovery in the third quarter.
Against the euro, the pound plunged to a
two-week low of 0.9148, resuming its fall for a second session in a row.