PM May's exit strategy holds up pound but political risks loom large

London

THE POUND may have rallied the most since the 1990s after Prime Minister Theresa May promised a parliamentary vote on taking the UK out of the European Union, but the currency isn't out of the woods yet.

Sterling strengthened against all major counterparts on Tuesday after Ms May pledged to quit the single market and instead seek a customs agreement with the bloc to deliver "a smooth and orderly Brexit".

While the currency's 17 per cent slump since the nation voted to leave the European Union has ensured that much of the bad news is priced in, political risks still loom large, strategists and fund managers say. Though sterling may be undervalued based on some measures, the UK's widening current-account deficit adds to its vulnera…