Political turmoil over Brexit has sent the pound plummeting close to its lowest level this year.
Sterling dropped as much as 0.65% against the US dollar on Wednesday to just above $1.26 before recovering slightly. The currency has shed about 2.8% this month, and is on track for a record 13 straight days of declines against the euro, according to analysts.
The fall comes as Britain once again faces the prospect of a messy exit from the European Union.
Prime Minister Theresa May on Tuesday unveiled details of her final bid to get a Brexit deal through the UK parliament. Her new pitch, framed as a compromise, would let members of parliament vote on whether to hold a second referendum if they first backed her deal.
But the plan was met with opposition from across the political spectrum and appears dead on arrival.
Now pressure is building for May to step down. Conservative Party leaders will meet Wednesday to discuss changing party rules, a move that could open the door for her ouster.
The confusion is encouraging investors to ditch the pound, with no signs of a recovery any time soon.
Britain is due to leave the European Union on October 31, after Brexit was twice delayed. EU officials have already said they won’t renegotiate the deal they agreed with May earlier this year.
If UK lawmakers continue to refuse to ratify May’s deal, the country may have to leave the bloc without any measures in place to protect trade — an outcome the government itself has warned would be deeply damaging to the UK economy.
Jameel Ahmad, global head of currency strategy at FXTM, said in a note Wednesday that he expects the pound to dip to $1.25 as May’s vulnerability dominates headlines.