After a brief uptick yesterday, the pound has sunk to a 30 month low today. This is due to a stronger dollar and ongoing no-deal Brexit fears.
The government have announced an extra £2.1 billion of funding for a no-deal Brexit, doubling their budget. This has increased expectations that the UK will leave the EU without a deal on October 31st. Chancellor Sajid Javid said that the extra money will “ensure that we are ready to leave on the 31 October, deal or no-deal.”
After a poor start to the week and four days of losses, sterling stabilised yesterday. As predicted by most analysts, this was a temporary bounce, and possibly down to the fact that a no-deal Brexit hasn’t been fully priced in yet.
Focus turns to the Bank of England’s interest rate decision this afternoon. A rate cut is not expected, but pound’s position and possible implications of a no-deal Brexit are expected to be addressed.
