Pound Continues To Drop After Brexit Deal Woes Continue
The pound has continued to further decrease against the dollar after continued concerns about a Brexit trade deal. With the United Kingdom officially leaving the European Union last Friday, the government now has until the end of 2020 to negotiate a trade deal with the EU and their other major markets.
However, uncertainty about what kind of deal the UK will try to negotiate and what a post-Brexit Britain may look like for the most significant industries of the United Kingdom has seen sterling diminish in value when markets open, with a less than optimistic outlook to the next few days.
Drop As Sparring Starts
The pound dropped 1.4% against the dollar and around 1% against the Euro as increased concerns about Britain ending its transition period without reaching a suitable trade deal rise amongst the international investment community.
Experts have even suggested that, while politicians postulate about Britain’s exit from the European Union being a moment of great strength for the country, many are concerned about how this will impact trade, the global economy and foreign exchange rates against the pound.
Representatives from the EU have already called proposed plans for Britain’s trade deal ‘ambitious’ and leave question marks over significant areas, including broaching an arrangement with Northern Ireland and the Republic of Ireland that won’t threaten the fragile peace currently enjoyed by its residents.
The central concern for many investors is that increased and ongoing uncertainty across markets and individual sectors will slow down the UK’s economic growth and discourage both domestic and international investors to engage in trade and other business agreements with Britain.
The UK economy has been plagued with uncertainty over the last few years as the Conservative government struggled to negotiate a leave deal with the EU that satisfied all parties and could be passed through the House of Commons.
According to reports, Prime Minister Johnson is looking for a Canada style trade deal with the European Union, though continued vague language towards what the deal actually involves and how Britain will operate outside of the EU threatens to destabilise the pound.