November 15, 2018 / 6:47 PM / a month ago

Ministers quit over Brexit draft, pound and bank stocks tumble, May vows to fight

LONDON (Reuters) - Prime Minister Theresa May battled on Thursday to save a draft divorce deal with the European Union after her Brexit minister, Dominic Raab, and other ministers quit in protest and eurosceptic MPs stepped up efforts to topple her.

Customers in the Red Lion pub watch television sets broadcasting a news conference by Britain's Prime Minister, Theresa May, in London, Britain November 15, 2018. REUTERS/Simon Dawson

LATEST DEVELOPMENTS

- May held a news conference to underline her determination to stay the course, saying: “Am I going to see this through? Yes.”

- Sterling fell 1.8 percent against the dollar [GBP/] - Against the euro, it was down 2 percent, its biggest fall since shortly after the 2016 Brexit referendum.

- Credit rating firm S&P Global warned it could cut Britain’s AA credit rating again if the risk of a “disorderly” Brexit became more apparent.

- The cost of insuring exposure to Britain’s sovereign debt rose to its highest level in almost two years. British gilt yields plunged.

- Environment Secretary and Brexit advocate Michael Gove is willing to replace Raab as Brexit secretary only if he can renegotiate the deal and a Nov. 25 EU summit to endorse it is scrapped, the Daily Telegraph’s deputy political editor tweeted.

- A Times reporter quoted a source saying May’s office expected Gove to quit the cabinet on Thursday.

- May said she would will announce cabinet appointments in due course.

- The Financial Conduct Authority said it was in regular contact with financial firms as shares in major banks tumbled on worries over future access to the EU market.

- Shares in Royal Bank of Scotland were down 9.6 percent, their biggest one-day fall since the June 2016 referendum. Barclays and Lloyds Banking Group dropped 4.1 and 5.0 percent respectively.

- Carmaker BMW said it was continuing to prepare for a no-deal Brexit, amid all the uncertainty.

- France led calls among EU states for changes to the draft deal.

- A leadership challenge to May could be completed in weeks, eurosceptic lawmaker Jacob Rees-Mogg said.

- The BBC reported Conservative MPs have not yet submitted enough letters to trigger a confidence vote in her.

- A vote is triggered if 48 Conservative MPs (15 percent of the total) write a letter of no confidence to the chairman of the party’s 1922 Committee, Graham Brady.

- May’s spokesman said she would fight for her premiership if such a vote was called.

STOCK MARKET

- Brexit-sensitive British stocks slid. Housebuilders, retailers and banks all fell, dragging the mid-cap FTSE 250 index down 1.3 percent, while the exporter-heavy FTSE 100 managed to hold flat, supported by a plunge in the value of sterling. [.L]

DEBT MARKET

- Nerves among British government bond investors forced the debt agency to accept low bids for a 20-year bond at auction to an extent not seen since March 2009.

- Data from Refinitiv showed the spread between 10-year and 30-year gilt yields had ballooned by more than 11 basis points.

FINANCIAL INDUSTRY

- British financial regulators held a conference call with major banks seeking feedback on market conditions after the pound and financial stocks sank following Raab’s resignation, sources said. One source said the call was a direct request from Bank of England Governor Mark Carney. The central bank declined to comment.

- Britain’s financial services industry greeted the draft agreement with weariness and worry, spooked by a political revolt that could topple the government and bring fresh troubles to a sector already reeling from upheaval.

- Euro zone banks that issued large amounts of loss-absorbing debt under English law could have more time to meet requirements after Brexit, according to the bloc’s agency responsible for winding down failing lenders.

THURSDAY’S RESIGNATIONS

- Dominic Raab: Brexit Secretary

- Esther McVey: Work and Pensions Secretary

- Shailesh Vara: junior Northern Ireland minister

- Suella Braverman: junior Brexit minister

- A parliamentary aide to education ministers and a Conservative Party vice chairman also quit.

MAY’S COMMENTS TO PARLIAMENT

- “We have been preparing for no-deal and we continue to prepare for no-deal because I recognise that we have a further stage of negotiation with the European Council and then that deal when finalised ... has to come back to this House.”

“The choice is clear: We can choose to leave with no deal, we can risk no Brexit at all, or we can choose to unite and support the best deal that can be negotiated.”

EU COMMENTS

- German Chancellor Angela Merkel:

“We have a document on the table that Britain and the EU 27 have agreed to, so for me there is no question at the moment whether we negotiate further ... You have to see the alternatives and then ask: is what we have a basis?”

- French Prime Minister Edouard Philippe

“We need to prepare ourselves for the possibility of a ‘no-deal’ Brexit.

“It will escape no one that the current political situation in Britain could fuel uncertainty... over the ratification of the accord.”

Compiled by David Stamp and Kevin Liffey

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