Gordon Brown's resignation prompts fall in the pound

The pound has fallen on the foreign exchange markets after Gordon Brown announced he was stepping down as leader of the Labour Party.

His departure will leave a political vacuum, with none of the main political parties having secured a ruling majority in last week's general election.

The Conservative Party has been trying to reach an agreement with the Liberal Democrats to create a coalition government.

But the resignation of Mr Brown means a deal between Labour and the Liberals may now be more likely.

Sterling fell against the dollar this morning (Tuesday May 11th), hitting $1.48.

Commenting on the currency movements, Michael Hewson, an analyst at CMC Markets, said they have occurred as a result of political and fiscal uncertainty.

"Markets fear the political instability of further delays as well as the inherent instability of what is now being dubbed a 'rainbow coalition'," he remarked.

Posted by Sarah Pitton

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