The pound fell by around 0.5% against the euro yesterday as EU-UK trade talks remained in stalemate.
With the news focusing on the Manchester Covid funding row and potential for a further lockdown if England opts to follow Wales, there was little new on the Brexit trade talks, which continue to be the main determinant of sterling’s direction.
A statement from the UK side yesterday said: “Lord Frost and Michel Barnier had a constructive discussion. The situation remained as yesterday, and they will remain in contact.” The EU said: “We should be making the most out of the little time left. Our door remains open.”
The modest weakening of sterling suggests that the markets believe talks are stuttering along to a thin deal that avoids any more disruption, allowing each country to look after the bigger issue: protecting their people and economies from the effects of the Covid second wave. The UK had 241 deaths from coronavirus yesterday – the highest since 5 June.
Forecasters for the world’s largest financial institutions have, over the past few weeks, been working out what all the competing factors might mean for sterling. We amalgamate their predictions – along with deeper analysis from our in-house analysts – in our Quarterly Forecast.
You can download it here.
I would urge you, however, to take any such predictions with a large pinch of salt. Although they make interesting reading – especially the analysis – we strongly recommend you protect your budget from any and all risk, by locking in an exchange rate you know you can work with.
Speak to your trader on 020 8108 5337 to do that.
And once again, sadly, I have to urge you to stay safe.
