A sharp slump in the price of sterling early on Monday is unlikely to continue, according to currency experts, who believe that fears over U.K. Prime Minister Theresa May's leadership are exaggerated.
The pound dropped 0.9 percent Monday morning to $1.3070, aided by a report by the U.K.'s Sunday Times newspaper which revealed a group of 40 Conservative members of parliament have agreed to sign a letter of no-confidence in May following months of criticism of her leadership.
The key question, analysts say, is whether this represents political noise or real underlying change. "No major names are calling for (May's) head — it probably will be like the attempt to get rid of her a couple of months ago that was unsuccessful. The risk will probably pass," Kallum Pickering, senior U.K. economist at Berenberg, told CNBC via email.
A no-confidence list in early October following May's speech at the Conservative Party annual conference garnered 35 names. The number required to trigger a vote is 48.
The report underscores persistent fears surrounding May's handling of an onslaught of crises facing her Conservative Party, including a weakened majority, internal divisions over Brexit, multiple sexual harassment allegations and cabinet member departures. Brexit proceedings remain sluggish, and EU demands for greater detail on issues like the U.K.'s financial commitments, the rights of EU workers and the Irish border have yet to be met.