Theresa May, the UK's Prime Minister, downplayed the possible consequences of a “hard” Brexit withdrawal which pushed the Pound Sterling near to a 1-year trough versus the common currency Euro. In contrast to the Finance Minister's warnings of possible economic damage, Ms. May reported that no deal “wouldn't be the end of the world.” Given her comments, more and more investors are beginning to accept the possibility that that no deal might, in fact, be the outcome even as the leadership within other EU nations prepares for just such an eventuality.
As reported at 11:18 am (BST) in London, the EUR/GBP was trading at 0.9047 Pence, down 0.20% and off the session peak of 0.90757 Pence. The GBP/USD was trading at $1.2898, up 0.04%; the pair has ranged from a trough of $1.2862 to a peak of $1.2910.
Many Hurdles Ahead
Analysts say that while the UK's latest economic indicators have helped provide a lift to the Pound, what is weighing on to a very great extent is the political uncertainty as it relates to the upcoming Brexit. An informal deadline to agree to a deal is set for October but many critics believe that an emergency summit the following month is likely to be needed. While the need for a deal is critical, it is only the first hurdle to a soft Brexit, with any agreement requiring ratification in the UK Parliament.