U.K. Prime Minister Boris Johnson lost majority support in the House of Commons as he faced a showdown Tuesday with members of the Conservative Party.
Earlier today, Conservative Party MP Phillip Lee defected to the Liberal Democrats. Lee took his seat on the opposition benches as Johnson addressed the House of Commons, which caused a huge stir.
Lee’s defection means that Johnson no longer has a working majority in parliament. Lee has said the government was "pursuing a damaging Brexit in unprincipled ways," putting lives and livelihoods at risk.
A general election is also a possibility if MPs force Johnson to seek a further delay to Brexit in their attempts to prevent a no-deal departure from the EU. "Live discussions" are going on in No. 10 about asking Parliament to approve a snap poll, according to the BBC.
The Financial Impact
Reuters said a United Nations report has concluded that a no-deal Brexit would result in U.K. export losses of at least $16 billion, representing an approximate 7% loss of overall exports to the E.U.
The political turmoil in the U.K. is also impacting the pound sterling.
“The British pound can hardly escape the downward spiral as the numerous political imponderables have completely poisoned the atmosphere around the currency,” said Marc-André Fongern, an analyst at MAF Global.
"Basically, it's a tightrope act to predict whether a no-deal scenario might be avoided at the very last minute. This omnipresent uncertainty is, in my view, the most significant burden on the pound sterling. The Bank of England also urgently needs clarity in this respect."
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