Theresa May has successfully weathered a challenge to her leadership launched by Tory hardline Brexiteer MPs, winning the support of a credible majority of the Parliamentary party.
May, who earlier today had sought to cast her survival as being potentially critical in seeing through Brexit as she attempted to shore up wavering support, won the backing of 200 of her colleagues with 117 opposed.
Both the City and bookmakers had earlier calculated that May was odds-on favourite to win the ballot with a circa-70% probability of victory, but added the margin of support would be decisive.
Sterling had earlier risen from $1.252 to $1.265 ahead of the ofthe vote, capping several days of extraordinary volatility which saw the currency plunge to a low last seen in April 2017 below $1.25.
The FTSE 100 had ended Wednesday's session more than a percentage point higher as traders anticipated May beating the rebels and reasserting the government's agenda.
May had earlier in the day said it was her intention to stand down before the next scheduled election under the fixed-term Parliament act, due in 2022 adding ‘she did not believe’ victory would be a long-term source of legitimacy.
Speaking to reporters, she added: ‘A change of leadership in the Conservative party now will put our country’s future at risk and create uncertainty when we can least afford it.'
That became a rallying cry for her backers, who suggested that an internal party competition during a period of national crisis would not be well perceived by the general public.
While the vote provides more transparency on the direction of the Tory party it provides little insight into the ultimate terms of the UK’s exit from the EU in March 2019.
May had managed to maintain a highly uneasy party discipline over the last two years and a broad yet shallow foundation of support among her parliamentary colleagues, but even that tenuous hold had slipped in the last week as the government abandoned a vote on its exit terms at the 11th hour, as it became clear the deal would be rejected by a significant number of MPs.
Only the urgency of the Brexit negotiations – and the increasingly credible threat of a Corbyn government – had secured her position following the disastrous election of 2016, in which a leaden performance and tin-eared policies effectively threw away a Conservative parliamentary majority.
That left her government fatally dependent on the vote of the Brexit hardliners of the DUP. But she had earlier needlessly poisoned a big reservoir of potential support by aligning herself with the far right of her party, castigating ‘citizens of nowhere’.