The pound climbed against the dollar and the euro on Monday, just hours before Prime Minister Boris Johnson was set to face a vote of confidence called by his Conservative Party.
Johnson was anticipated to win the vote, which was scheduled after an increasing number of Conservative legislators questioned the British leader’s waning power in the wake of the “partygate” controversy, which resulted in police penalties for events on Downing Street that violated COVID-19 lockdown guidelines.
Sterling was 0.4% higher to the dollar at $1.25690 by 1506 GMT, having earlier risen as high as $1:2577.
Many analysts saw the confidence vote as potentially pound-positive if it drew a line under partygate and eased uncertainty over Johnson’s threats to scrap post-Brexit agreements regulating goods shipments from mainland Britain to Northern Ireland. The pound has been under pressure this year, having just wrapped up five straight months of losses, weighed down by Britain’s dismal growth outlook.
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