By James Sillars, business reporter
The pound has fallen sharply on increasing speculation the UK is heading for a general election, as the clock ticks down to the Halloween Brexit deadline.
It hit its lowest level against the dollar since the so-called flash crash in October 2016 early on Tuesday, falling as low as $1.1957 – down almost 1% on the open.
The slide began early on Monday when weak manufacturing data did little to ease fears of a UK recession.
Sterling later slipped by more than a cent against the US dollar towards $1.20 and was nearly a cent lower versus the euro, dipping below €1.10 as election speculation emerged and grew.
The decline continued as politicians continued to squabble over Brexit and the theory that the prime minister was ready to call an election should MPs, including Tory rebels, win a parliamentary bid to block a no-deal Brexit scenario.
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Boris Johnson used a statement outside 10 Downing Street to say he did not want to go to the country but a government source has since told journalists an election would be called for 14 October should Mr Johnson lose Tuesday's cross-party vote.
The pound has been wracked by Brexit uncertainty ever since the 2016 referendum and pressure on the currency has intensified in recent weeks as the prospect of a no-deal scenario grows.
