020 7898 0500The pound began the day in a position of strength and approached its highest mark against the dollar for some time. Alas, the run could not continue and when The Telegraph reported that Theresa May faces a new Cabinet revolt because her customs union backstop for Brexit doesn’t have a time limit, the pound fell back. There could well be further resignations in the coming days and it looks increasingly unlikely that May will be able to get her plans through parliament.
As time goes on, it is becoming more and more likely that there will be no deal. It seems there are just too many different camps to please and all of them have different opinions on the best way forward. So many issues still need to be ironed out and time is running out. The next couple of months could prove critical. Those demanding further concessions from the EU appear to be forgetting the fact that nobody from the UK can agree what those concessions should be. May is in an impossible position and has been for some time, but so too are the EU leaders. In the words of Blackadder, this is the stickiest situation since Sticky the Stick Insect got stuck on a sticky bun.
The chart below shows the pound’s movements against the dollar over the past month. As you can see, it has been a topsy turvy ride and there is nothing to suggest this will end any time soon. So much hinges on Brexit, whether a deal can be agreed and, if so, what kind of deal. Some major sterling moves could be on the horizon in the few weeks and months and in which direction is almost entirely dependent on Brexit progress.
