The pound fell to a three-week low yesterday as the UK released their negotiating mandate for UK-EU trade talks. British officials confirmed their hard-line stance, saying that the government will walk away from trade talks in June unless there’s a ‘broad outline’ of a deal by then. This brings back the possibility of a no-deal Brexit, which doesn’t usually fare well with sterling.
They also said that they wouldn’t accept any alignment with EU laws, as demanded by the EU.
Sterling also weakened as doubts were cast over the upcoming Budget. Chancellor Rishi Sunak has been told by Treasury officials that he can’t both raise public spending and keep taxes down whilst adhering to new Treasury rules.
Consumer Confidence figures came in better-than-expected this morning at -7, but it’s likely that sterling will continue to be driven by the prospect of a no-deal Brexit.
