While the pound has slumped almost 2 percent in just three days,it may take more market drama to mount pressure on U.K. politiciansto agree on a Brexit plan, according to Royal Bank of Canada.

Sterling slid as much as 1.1 percent Monday amid media reportssuggesting that the U.K. prime minister's plan for leaving theEuropean Union is increasingly unlikely to make it throughParliament. A group of pro-Brexit Conservative Party lawmakers andNorthern Ireland's Democratic Unionist Party, which supports May'sgovernment, joined forces to publish an article in the SundayTelegraph saying they are prepared to vote down the premier'sproposals.

“The chances of the cabinet signing off on a Brexit deal thisTuesday look slim,” Elsa Lignos, global head of currency strategyat Royal Bank of Canada, wrote in a research note. “It feels likemarket pressure will have to get worse before there is acompromise.”

Earlier this month, sterling had rallied amid mounting optimismthat a divorce deal with the EU was imminent. Yet May is now beingpressured by her own colleagues and other lawmakers to drop herplan or face defeat when it goes to a vote in Parliament. Theopposition Labour party suggested Sunday that it may not back theproposals, and her pro-EU transport minister resigned Friday.

From: Bloomberg

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