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Analyst at Danske Bank Aila Mihr assessed the recent developments in the Conservative Party and the Sterling.

Key Quotes

“There was no surprises at the Conservative Party congress yesterday and EUR/GBP was little changed during Theresa May’s speech”.

“The Conservative MP James Duddridge told Sky news that he has submitted a letter of no confidence to Theresa May, and focus in the coming days will be whether other MPs follow Duddridge”.

“A vote of confidence can only be triggered if 15% of Conservative MPs (48 members) write a letter to the chairman of the 1922 committee asking for such a vote. If a vote is triggered, it would of course increase uncertainty and induce a GBP sell-off”.

“We expect GBP to remain volatile and sensitive to any Brexit-related news in coming months. We target 0.89 in EUR/GBP near term with risks skewed to the upside”.