The British pound slumped to its lowest level in more than 3 years yesterday, falling below the $1.20 mark before recovering after a major defeat was handed to UK Prime Minister Boris Johnson by the British parliament

The Commons voted 328 to 301 to take control of matters regarding the next Brexit steps, allowing them to bring a bill requesting a Brexit delay.

The PM is to call for a general election if he is forced to request an extension to the 31 October deadline.

MPs will now vote on the Brexit delay bill and If it passes, PM Johnson is expected to call a snap election which will have to be approve by a 2 thirds majority of parliament.

This is a huge risk for the conservative party as the possibility of Mr. Johnson losing the election is quite high which would bring a Labor government to power.

This is now another huge round of uncertainty for the UK economy and depending on how the next steps play out, the pound could be looking at further losses.

“Ignoring the flash crash, we are very much in uncharted waters here. We could feasibly see 1.15 or even 1.10 in the coming weeks if traders decide to move against the pound.” Said Neil Wilson, of Markets.com, said

“Elections are never easy to call – the risk of Corbyn to UK assets is probably greater than a no-deal Brexit, after all. The outlook for sterling may well worsen if there is an election and will certainly deteriorate if it’s a no-deal.” He added.