Delayed Brexit may boost pound
Published on 03.07.2018 16:12

With all the trouble surrounding Brexit and the damage it’s doing to the UK economy, more and more analysts are starting to wonder whether it will even happen at all or at the very least, a soft Brexit which will see the UK keep major parts of existing arrangements with the EU.

British Prime minister Theresa May is now under serious pressure to deliver some concrete solutions on Brexit to the British public and businesses alike and failure to do so may see here loose ousted from the top job and lead to a snap election which her party would likely loose.

“With the time running out ahead of the U.K.’s exit from the EU, business patience is reaching breaking point,” said Director General Adam Marshall from the British chamber of commerce.

“We are little closer to the answers businesses need than we were the day after the referendum. “Businesses have every right to speak out when it is abundantly clear that the practical questions affecting the competitiveness of their firms and the livelihoods of millions of people remain unanswered” He added.

The longer the uncertainty drags on the less likely Brexit will happen according to a growing number of analysts which will be of great benefit to the British pound, with Bank of England governor Mark Carney backing up this statement last week by saying that Brexit has stopped what would of otherwise been a boom in investment in the UK.

“As best we can tell, and supported by anecdotal evidence, markets appear to attach a surprisingly high probability to the whole Brexit process being delayed or even never happening,” said Adam Cole, chief currency strategist at RBC Europe Ltd.

 “It is not difficult to make a case for risk in sterling being under-priced, and that is indeed our bias.” He added.

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Andrew Masters

Analyst

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