FX traders are becoming increasingly concerned over the likelihood that the UK government will not have been able to work out a Brexit plan when the time comes for Britain to leave the European Union next year. Liam Fox, a Theresa May supporter and a member of her Cabinet, last week claimed the odds at 60-40 of a “no-deal” Brexit. The government, in fact, has begun to consider that a strong possibility and are making plans to contain the fall-out as a result. That news resulted in the Pound coming under pressure, despite last week's rate adjustment from the Bank of England.
As reported at 10:50 am (BST) in London, the GBP/USD was trading at $1.2964, down 0.24%; the pair earlier hit a session trough of $1.2954 while the peak is at $1.3012. The EUR/GBP is trading higher at 0.89182 Pence, a gain of 0.25%; the pair ranged from 0.88900 Pence to 0.89215 Pence in the current trading session.
New Rules, New Tariffs
Without an official Brexit plan in place, trade for Britain and the EU would fall under rules enacted by the World Trade Organization which would mean tariffs would be put in place. That, says analysts, could seriously harm the UK economy in the long run, though some argue that the pain is likely to be short-lived.