Boris favourite to be next PM
Sterling has dropped in value against the majority of major currencies for most of the month. We currently have no PM and we remain in complete Brexit limbo. Boris is hot favourite to come in as PM next week and whoever comes in will only be in the role for a few days until parliamentary recess commences. The recess will conclude on 3rd September, leaving less than two months to resolve Brexit, something Theresa May failed to do in two and a half years.
Rumours of a general election: How would this affect GBP/EUR rates:
There are also rumours circulating that Boris could call a general election, Ladbrokes have it priced at a 47% probability. It is believed that a Conservative victory would be easily achieved with Corbyn as the biggest threat. If a general election is called you would expect further Sterling weakness as further uncertainty is added to the political situation. Boris and Hunt have also stated they are willing to bring a no deal back into the equation in order try and get a more favourable deal from Brussels. The higher the probability of a no deal the weaker you would expect the pound to become.
Something it seems UK politicians are neglecting to take on board is that Brussels stance has not changed. It has been stated on numerous occasions the deal on the table is the only deal and there will be no concessions.
The market moves on rumour as well as fact , I think if Boris gets in it is already largely factored into current levels and will not cause any great shakes.
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