Home » Currency Note » Currency Note » Unworkable Chequers plan weakens pound

Just when it looked as if there was some light at the end of what has proved to be a very long tunnel, along come all the EU leaders, Tory sceptics, members of opposition parties and some Tory remainers to say that the Chequers plan put forward by the government is unworkable. Theresa May was typically defiant in the face of the latest maelstrom when she gave a statement in Downing Street on Friday.

The Prime Minister said that while both sides want a deal, there are two areas where the UK and EU are ‘a long way apart’, with the EU only offering two options on the future economic relationship. Those options are, firstly, the EEA – which would mean the UK has to abide by all EU rules without being able to form trade deals with any other countries and, secondly, a basic free trade agreement for Britain and Northern Ireland remaining in the customs union.

Both options are considered unacceptable, which really has ramped up the chances of a no-deal Brexit. It is difficult to think of where we go from here. Presumably another plan will have to be drawn up by the government, but that will likely be rejected by the EU if it doesn’t involve either of the options listed above. So, what next? The truth is I have not got a clue, but I certainly do not envy May at the moment. She is faced with an impossible task.

The pound significantly weakened as the news filtered through and suffered a drop of 1.07 against the euro. In just this week alone, between the high and low, if you’d been paying for a €200,000 property, you’d have needed to suddenly find an extra £3,000. That’s not an insignificant sum if you haven’t budgeted for it!

It bears repeating: you can minimise the currency risks associated with Brexit uncertainty, or offset them entirely, with effective methods in place.

With the deadline for Brexit fast approaching, it makes sense to speak to one of our team about the options available to you. We are not scaremongering – the pound really could sink to new lows against the euro and dollar if we withdraw from the EU without a deal. You’ve seen in the last three days how we’ve gone from a stable rate to a sudden drop.

Luckily, despite the complexity of the factors affecting the currency markets, protection is simple. Your Personal Trader can use a forward contract to lock in your exchange rate – so you know that no last-minute movements will cause you to lose money. Don’t try to second-guess currencies – give your Personal Trader a call on 020 7898 0541.

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