Sterling reverses on talk of snap UK general election

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The pound has taken a sharp turn lower in the last few minutes amid talk that UK prime minister Theresa May could announce a snap general election.

Mrs May will be delivering a statement on an as yet unknown topic outside 10 Downing Street at 11.15am (BST). She was made prime minister after assuming leadership of the Conservative party following the UK’s Brexit vote last summer.

Sterling is down 0.3 per cent against the dollar on the day, having previously been up as much as 0.3 per cent to around an eight-week high in the last hour. The UK’s 10-year gilt yield slipped to its lowest since October, losing 3 basis points (0.03 percentage points) to 1.008 per cent.

Less than a month ago, Ms May categorically denied the possibility of calling a snap election this year arguing it would be a distraction from the UK’s EU exit talks. Britain formally kicked off its Brexit talks three weeks ago.

“There isn’t going to be one. It isn’t going to happen. There is not going to be a general election,” Mrs May’s spokesman said on March 20.

A number of senior Tory party MPs, including former foreign secretary William Hague, have pushed for an early vote. Under Britain’s fixed-term parliaments, a snap election would require the support of the opposition Labour party.

Chart via Bloomberg

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