- GBPEUR exchange rates fall below 1.11
- Angela Merkel and Francois Holland encourage European leaders to take firm post-Brexit stance
- UK to adopt hard Brexit
- UBS predictions of Pound to Euro parity look more likely
Pound Sterling is being driven by sentiment as opposed to economic data, the latest news from French President Francois Holland adds further pressure to post-Brexit negotiations. Angela Merkel has also added her comments to the subject of open border policies, urging German businesses to take a firm approach to UK trade deals.
The UK is looking increasingly likely to remove itself from the EU and any subsequent memberships, in order to tighten its borders as set out by Theresa May during her Tory conference this week.
If this rings true, the UK could be in for a bumpy ride as it looks to fill the financial gap with trade deals elsewhere, a move that could take years to materialise.
There is then the concerns for the Financial sector as stricter border controls could cripple the UK’s status as the financial hub of the World, the financial sector is the UK’s biggest contributor to GDP and should be a priority for the new government.
But Theresa May has insisted there will be no special status for firms and has reiterated that the British people have spoken.
UBS predictions last year look more likely
Last year UBS predicted the Pound would fall to parity in the wake of Brexit and further developments make these predictions more prominent. Today’s industrial and manufacturing output figures took a dive for the worse and as a result, Sterling has fallen a further 80 pips since the beginning of Friday’s trading morning.
Further negative economic news from the UK could see rates fall further, and I would encourage those holding Sterling to consider what GBPEUR parity would mean to your finances.