Boris vs Jeremy: The affect on the Pound to Euro rate
We have had a very busy end to the week with Boris Johnson and Jeremy Hunt now the last two candidates in the race for the Tory leadership election. Johnson won the ballot with a total of 160 votes. Meanwhile, Jeremy Hunt managed to get 75 votes in total.
We are now just a month away before the next official Tory Prime Minister is announced. The expected date is July 22nd so we may see a lot of movement for GBP/EUR exchange rates during this time. The last two candidates will have to convince the 160,000 Tory members to vote for them. Both candidates have differing opinions on Brexit, but Boris appears to be the bookie’s favourite.
However, although we are getting closer to finding out our new leader the situation surrounding Brexit remains very uncertain. Boris has claimed that the UK will leave the European Union by 31st October and has also suggested no deal. However, although there is still a chance of this happening I think the UK will be left with no choice but to change tact.
Will the EU re-open negotiations?
The news from the EU summit is that the various leaders in Europe have little appetite to change the deal that was offered prior to the 29th March. This was when the original deadline was supposed to be completed. However, it appears very clear that the House of Commons will not approve the current plan. Therefore, with the new Tory leader due to take place in late July I think there is little time left to get a new deal organised. Typically in August Europe will shut down. Therefore, this only leaves two months for the UK to organise a different plan. To me this is simply, not enough time.
Overall, I expect the pound to continue to struggle against the euro and unless we have some bad news coming from the eurozone in the near future I think we could see further losses coming for sterling.
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