The pound is at stronger levels against the dollar and the euro this morning, hitting a three-month high against the dollar on hopes that the UK and the EU are closing in on a trade deal. Negotiators engaged in a second night of intensified talks in London, with one EU source calling it the “big push”.
Despite this, there are also reports that France could still threaten to veto the agreement on fisheries and that the EU have brought last minute requests to the table. This uncertainty could cause the pound to become volatile over the coming days. The focus is still to agree a deal by the European Council meeting, which takes place 10-11 December.
As predicted, PMI data yesterday showed that the UK service sector fell into contraction territory in November, however the figure came in better-than-expected. This shows that business activity was hit by a second lockdown in England and tightened COVID-19 restrictions across the rest of the UK. This figure also reflects reports of widespread redundancies.
