BoE outlook and progression in Brexit talks boost the pound
The Pound has made significant gains against the euro this week, following news that there has been progress in talks between Theresa May and Jeremy Corbyn as they attempt to put together a deal that will be accepted by both parties.
Another catalyst for the pound’s rise was the positive news from Bank of England Governor, Mark Carney. He said that the future of interest rates in the UK would largely depend on the progress made on Brexit, and that he was hopeful about a resolution. This news boosted investor confidence and in turn sterling.
Personally, I believe that sterling is overvalued I am not convinced a satisfactory deal will be put together by 23rd May. Theresa May has been unable to get a deal together that is widely accepted by her Party, let alone one that is accepted by Labour as well. The PM’s deal has failed to gain a majority on three occasions when put before the House of Commons, and I have little faith in it going through successfully this month due to the very short time scale, especially when we consider that fact that Parliament have had over two years to get this sorted.
Brussels’ stance remains the same; it has been reiterated that there will be no changes to the current deal and there will be no concessions on the Irish border. With the UK being stone walled it seems to me we may well remain in Brexit Limbo.
Despite the pound’s recent gains I would expect it to remain fragile until we have firm news on Brexit.
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