THE pound fell into the red as the expected dismissal of International Development Secretary Priti Patel raised concerns over the future of Prime Minister Theresa May's Government.
Market jitters sent sterling down around 0.5 per cent against both the euro and the US dollar to trade at 1.309 and 1.130, respectively.
The currency's drop helped lift the FTSE 100, which ended the day higher by around 0.22 per cent or 16.61 points at 7,529.72 points.
Investors were reacting to concerns that there could be further turmoil in Mrs May's Cabinet after Ms Patel was forced to cut a trip to Africa short in order to explain the disclosure of further unauthorised meetings with Israeli politicians.
Connor Campbell, a financial analyst at SpreadEx, said: "With Theresa May potentially about to lose a second MP in the space of a week - first Michael Fallon, and now Priti Patel (the latter of whom has drawn focus from Boris Johnson's latest fireable offence) - sterling isn't looking too happy.
"Another bout of chaos - though this Government is admittedly always in a state of low-level instability - ahead of December's next round of negotiations with the EU seems to have reminded the pound of how the country's uphill Brexit battle has a backdrop of utter political incompetence."
Across Europe, the French Cac 40 fell 0.17 per cent while the German Dax was flat, up just 0.02 per cent.
Brent crude prices were up 0.7 per cent at $63.97, continuing to trade at their highest levels since June 2015, as investors shrugged off data showing higher US production levels and weaker Chinese crude import figures.
In UK stocks, Persimmon shares were one of the worst performers on the FTSE 100, falling 102p to 2,772p, after issuing a thinly detailed trading update which suggested the company experienced flat sales for the quarter.
Shares in Rolls-Royce Holdings fell 16.5p to 959.5p amid news that the UK Serious Fraud Office will continue to investigate individuals linked to the company after US authorities charged five people who allegedly bribed government officials to help the engineering giant secure a major contract.
Marks and Spencer Group shares rose 5.3p to 333.1p as the retail giant said it would further "reshape" the clothing and home arm to focus on the most successful locations, while also driving more online sales.
It will also slam the brakes on its Simply Food store opening programme amid "difficult" trading and launch a "significant" cost review under the next push of its turnaround plan.
SSE fell 12p to 1,398p as the energy firm and the German owner of Npower announced that they had reached an agreement to merge their household energy supply and services business in Britain, turning the Big Six energy suppliers into five.
Esure Group rose 4.9p to 262p as the insurer secured record third-quarter premiums and hiked its outlook after a growth acceleration from its motor insurance arm countered a fall in the home unit.
The biggest risers on the FTSE 100 were CRH up 63p at 2,761p, Mondi up 42p at 1,845p, Centrica up 3.6p at 172.5p, and Mediclinic International up 12.5p at 606.5p.
The biggest fallers on the FTSE 100 were NMC Health down 140p at 3,059p, Persimmon down 102p at 2,772p, Associated British Foods down 113p at 3,105p, and easyJet down 43p at 1,262p.
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