The Pound has had a slow start today. This seems at least partially related to the comments from Brexit Minister David Davis over the weekend. Mr Davis made a number of comments during the weekend, with the comment in question included in an article in the Times newspaper, where he apparently suggested that the deal agreed with Ireland was not enforceable.
Following this the GBP/EUR exchange rate has shrunk back from the 1.15s that we saw on Friday of last week. Whilst the rate has not dropped down below the 1.13 level it is a way from last week’s high.
Mr Davis has since responded to the article in the Times, clarifying his comments and said that the story was “one of the most convoluted stories he’d seen”. He also pointed out that the UK was committed to having a soft border with Ireland which was met with positive comments from the Irish Prime Minister.
This is likely to have come from comments from the Brexit Secretary that indicated there were no guarantees on the Northern Ireland border issue as the agreement is not currently legally binding and is a “gentlemen’s agreement” until the UK and EU reach a final deal.
David Davis also made an appearance on the Andrew Marr show over the weekend, commenting that following Brexit the UK is looking for a “Canada Plus Plus Plus” deal from the EU and he also went on to say that the UK would not pay a divorce bill without securing a trade deal.
Sterling exchange rates currently seem relatively subdued, but it is thought that the currency markets are waiting to hear the outcome of the EU Summit at the end of this week (14th – 15th December). Given the exchange rate volatility we saw last week resulting from the agreement and the potential for progress, the EU Summit could result in some significant movement in GBP rates, with the Pound to Euro rate rising above 1.15 a real possibility.
Liberal Democratic Amendment Vote
Lib Dem leader, Vince Cable is urging PMs, including some Labour and Conservatives to vote on an alternative to the EU Repeal Bill, which could mean the United Kingdom would remain in EU’s single market and the Customs Union. However, the vote would require a large number of MPs to vote in favour which doesn’t currently seem likely. So, whilst no change is expected you never can tell when Brexit is involved.