Mandatory Credit: Photo by NEIL HALL/EPA-EFE/Shutterstock (10377967e) Conservative MP Phillip Hammond arrives at the cabinet office in London, Britain, 03 September 2019. Britain's Prime Minister Boris Johnson faces a vote in parliament from Tory rebels who are to join Labour in bringing forward a bill designed to stop the UK leaving the EU on 31 October without an agreement. Johnson faces vote in Parliament, London, United Kingdom - 03 Sep 2019
Former chancellor Philip Hammond, pictured at the Cabinet Office today, says he will vote with an estimated 15 to 20 Conservative rebels to try to stop a no-deal Brexit © EPA/Shutterstock

Britain’s deepening political crisis has heaped further pressure on the pound, which on Tuesday morning fell to its lowest level since the “flash crash” of October 2016 as investors braced themselves for a pivotal day in parliament.

Sterling declined as much as 0.8 per cent to $1.197. The last time it hit such a low level was four months after the 2016 EU referendum, when it tumbled 9 per cent against the dollar before quickly rebounding. The pound has not regularly traded below $1.20 since the mid-1980s.

Conservative rebel and former chancellor Philip Hammond predicted that MPs opposed to a no deal had the numbers to seize control of the House of Commons timetable on Tuesday to introduce legislation to force the government’s hand.

Mr Hammond, who resigned from the Treasury at the end of July as Boris Johnson became prime minister, said he would vote with an estimated 15 to 20 Conservative rebel MPs to attempt to stop a no-deal Brexit. At least two moderate Tory MPs and probable rebels, Justine Greening and Keith Simpson, said they would not stand at the next election.

“The whips have been pretty aggressive, offering inducements. But there’s a group of Conservatives that feel very strongly,” Mr Hammond told the BBC’s Today programme.

On Monday, Mr Johnson threatened to call a general election on October 14 if rebel Tory MPs join forces with Labour to “chop the legs out” from under his negotiating strategy to try to secure a revised Brexit withdrawal agreement with the EU.

Mr Hammond described the threat from Downing Street to deselect MPs who vote to stop no deal as “rank hypocrisy”, as several members of Mr Johnson’s present cabinet broke the government whip to vote against Theresa May’s Brexit deal.

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He also attacked Dominic Cummings, the prime minister’s chief adviser, as an “entryist” to the Conservative party and accused the prime minister of being disingenuous by stating that progress was being made in Brexit negotiations with Brussels.

“There is no progress. There are no substantive negotiations going on,” said Mr Hammond, citing the lack of meaningful alternatives to the Irish backstop, the insurance policy to prevent a hard border in Ireland.

Opposition MPs will meet on Tuesday morning to decide whether they support a general election if Mr Johnson seeks to call a snap poll this week. Labour leader Jeremy Corbyn will meet his counterparts in the Liberal Democrats, Scottish and Welsh nationalists and other independents to discuss tactics.

Amid contradictory statements from shadow cabinet members, Shami Chakrabarti, the shadow attorney-general, said that the party would consider backing a dissolution motion. “Of course we want a general election . . . we are geared up for it, we want it as soon as possible,” she told the BBC.

She added that the party would “need to get the sequencing right” before supporting a motion for an election, requiring a “locked-in guarantee that Britain would not crash out of the EU during a campaign period”.

MPs opposed to a no-deal Brexit are still expected to press ahead with plans to introduce legislation to stop a no deal. A growing number of Conservatives have said they will vote for the bill, which Downing Street has said will lead to deselection.

Ms Greening, a former education secretary, said it was not an “overnight decision” to stand down, adding she had concluded that she could make a bigger difference outside politics.

“It’s very clear to me that my concerns about the Conservative party becoming the Brexit party, in effect, have come to pass, so my decision is that if I really want to make a difference on opportunity and social mobility, I need to do that outside parliament,” the MP for Putney said.

Mr Simpson, MP for Broadland, said on Twitter his decision not to seek reselection made him “feel like the first officer to man the lifeboats on the Titanic!”.

Meanwhile, Brexit party leader Nigel Farage said that he would stand down its candidates if Mr Johnson pursued a no deal at the next general election.

Mr Farage said that “no aspect” of the withdrawal agreement was acceptable and accused the prime minister of wanting to “reheat” the deal agreed by his predecessor Theresa May.

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