020 7898 0500Sterling continued its slide lower against its major counterparts over concerns on how the economy will be affected by the possibility of a “hard” Brexit. In contrast, the FTSE continued to post record highs as many of its constituent members benefit from generating most of their revenues abroad.
There was further pessimism from Bank of England (BoE) policymaker Michael Saunders, as he stated yesterday morning that he would not be surprised if sterling fell further. He went on to say that the BoE could overlook the effect of a weak currency on inflation, possibly for years. Could this mean that interest rates could remain at record lows for the foreseeable future despite inflation? Another BoE member Anil Kashyap also stated that sterling could weaken further if Britain suffers a ‘hard’ Brexit. With months of negotiations in the pipeline it is hard to see any respite for the currency.
Today BoE Deputy Governor Jon Cunliffe is due to testify on the effect of the Brexit on financial services before the Financial Affairs Sub-Committee.
