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Brexit fears sink Pound

10 Sep 2020

The British Markets are preparing for a no-deal Brexit, pushing the Pound to Euro exchange rate to 1.099 on Thursday. 

The UK backtracked the Brexit Withdrawal Agreement resulting in new fears over the deal with the EU. 

Professor of European law at Cambridge University, Catherine Barnard said, “This is a remarkable piece of legislation and it expressly contravenes our international legal obligations to a point that the legislation itself says this is the intention, as did Brandon Lewis [the Northern Ireland secretary] yesterday.”

Tensions between the UK and the EU escalated yesterday after the President of the European Commission, Ursula von der Leyen commented that the UK Prime Minister Boris Johnson weakened the EU’s trust.

The UK’s economy is to be challenged by the latest “rule of six” restriction, which is set to begin on Monday. 

Moreover, Reuters reports, “The European Central Bank is all but certain to keep policy unchanged on Thursday but with the economic recovery losing momentum and a strong euro dampening already-anaemic inflation expectations, it may set the stage for more stimulus later.”

Interest rates are expected to remain at 0% by the ECB. 

Nigel Green, the CEO and founder of deVere Group, one of the world’s largest independent financial advisory and fintech organisations noted this week that “Widely regarded as a Brexit bellwether, the pound will be hit by significant volatility fuelled by politics. The brinkmanship between the UK and EU has been ratcheted up as the negotiators meet in London for the eighth and penultimate round of talks.”

“Investors need to monitor the trajectory of the pound to mitigate risks to their portfolios – especially if it is not properly diversified – as well as to capitalise on the opportunities that inevitably arise during times of volatility.”