Sterling continues to weaken after Brexit tensions and the possibility of a ‘no-deal’ increased yesterday. Boris Johnson has said that if a deal isn’t reached by the 15th of October, the UK will leave the Brexit transition period without a deal.
New legislation that the government is introducing as a ‘standby’ plan will also see an Irish border be re-imposed in the event of a ‘no-deal’. Several EU officials, including European Commission President, Ursula von der Leyen, have made statements warning the UK against this. Despite this, Boris Johnson and French President, Emmanual Macron, spoke yesterday and reports say that both are still committed to finding a deal.
This uncertainty and the rising possibility of leaving the EU without a deal has caused the pound to fall. Talks are due to resume in London later today.
Disappointing PMI and construction data from the end of last week may also have contributed to the pound’s fall. Both Services and Composite PMI were revised lower.
