Fears are mounting that Monday’s dramatic split in the U.K. parliament’s opposition Labour Party could prompt a similar fracture in the ruling Conservatives.
Seven pro-Europe politicians quit Labour in opposition to leader Jeremy Corbyn’s handling of Brexit — and concerns over anti-Semitism — and called on Europhiles in other parties to join them.
Up to six Conservatives are reported to be considering joining the breakaways, The Independent Group, alongside seven other Labour MPs.
Any significant split in the Conservative Party could make it impossible for the British Prime Minister Theresa May to govern, thereby forcing a general election.
It follows reports that the U.K.’s business secretary Greg Clark and pensions secretary Amber Rudd warned May that up to 22 government ministers and their senior advisers could resign if she doesn’t agree to rule out a no-deal Brexit.
Rumors are circulating of progress in Brexit negotiations between the U.K. and EU chiefs. A speech due to be given on Tuesday by the British attorney general Geoffrey Cox on a way out of the Brexit chaos has been postponed as the influential pro-Brexit lawmaker heads back to Brussels for further talks. He is also expected to publish papers on Wednesday that outline potential changes to the Irish backstop, the contentious plan to avoid a hard border in Ireland.
Sterling ticked up on the news of possible progress on Brexit, from $1.29003 at 07:00 to $1.29318 at 08:40 GMT before losing most of its gains to trade at $1.29187 at around 09:30.
Elsewhere, Japanese car manufacturer Honda announced it would close its Swindon car plant in 2021, with the loss of about 3,500 jobs. Honda said the move was nothing to do with Brexit, but its Swindon-based workers were reported to have said the decision was facilitated by the government’s “completely incompetent handling” of the U.K.’s split from the European trading bloc.