Government Step Up Planning For A No-Deal Brexit
- Posted by currencies in Bank of England, Brexit, Currency, Dollar, Economy, EUR, GBP, Sterling, UK, Uncategorised
- August 23, 2018
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Sterling fell again this morning as the government stepped up planning for a no-deal Brexit, reviving concern among investors about what would happen to the currency if Britain left the European Union without having agreed new trade arrangements.
With less than eight months until the March 29 exit day, diplomats in Brussels say they expect a delay in finalising the terms of Britain’s exit and may need to hold an emergency summit in November.
A rallying dollar and growing expectations that Britain could soon be fending for itself without any agreement with the EU, its biggest trading partner, are both punishing the pound.
Later on today, Britain will publish 25 technical papers giving advice for people and businesses to cope with any disruption arising from leaving the European Union without a deal.
Britain’s Brexit Minister Dominic Raab said he was confident a good deal with the EU remained in sight but that did not lift the currency.
Many economists say failure to agree exit terms would seriously damage the world’s fifth-largest economy as trade with the EU would become subject to tariffs and regulatory barriers.
Supporters of Brexit say there may be some short-term pain for the economy, but that long-term it will prosper when cut free from the EU.
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