BIG NEWS
Why sterling’s meltdown could get worse and what that would mean Pound’s buying power eroded by firming of UK’s no-deal Brexit stance
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he latest sterling meltdown has sparked bleak projections of a plunge in the pound to 34-year lows if the UK leaves the European Union with no deal in place. The Bloomberg poll of analysts at 13 banks found that the chances of a divorce without an agreement now stands at 30%, three-times the level of a similar survey in February. The impact of such an outcome could cut the sterling/dollar rate as low as $1.10, its lowest in a generation. The pound has weakened sharply over recent days with the market waking up to the reality of a new UK government, its rather combative stance on the current UK/EU Brexit deal and its open remarks on the rising probability of a no-deal Brexit. ‘Politics should remain the key negative for sterling in the months to come,’ say analysts at investment bank ING, putting risk to the pound ‘heavily skewed to the downside.’ Sterling skidded to a 30-month low against the
1.50
dollar, below $1.21 as fund managers, industry executives and Bank of England governor Mark Carney all lined up to warn about the hit to the economy of a no-deal Brexit under new prime minister Boris Johnson. WHO WINS FROM WEAK STERLING? UK exporters are obvious beneficiaries, including many of the UK’s largest stock market listed
June 2016 Britain votes to leave April 2019 UK asks for Brexit delay
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23 July 2019 Boris Johnson becomes Prime Minister
October 2018 Theresa May’s Chequers deal
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| SHARES | 08 August 2019
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