- Posted by currencies in Bank of England, Brexit, coronavirus, No Deal, Prime Minister, Sterling, UK, Uncategorised
- December 17, 2020
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Positive soundings from the European Union on Brexit talks helped lift the British pound above $1.35 and to its highest level against the dollar since May 2018.
The EU’s chief executive said she could not say if there would be a trade deal with Britain but there had been progress and the next few days would be critical.
Ursula von der Leyen said discussions on access to British fishing waters for EU vessels were “still very difficult”, but negotiators had moved forward on the other most contentious element – guarantees of fair competition for companies.
Upbeat mood on both sides around a possible Brexit deal before the year-end has helped the pound strengthen over 2% against the dollar this week.
The Bank of England is consulting with lenders to see what preparations they need to make if the central bank were to cut interest rates to negative levels to help the economy, badly hit by the COVID-19 pandemic.
BoE Governor Andrew Bailey has stressed that no decision has been taken on negative rates.
Prime Minister Boris Johnson said on Wednesday that people should plan only for a “merry little Christmas” and exercise extreme caution, but he refused to outlaw festive family gatherings as COVID-19 cases soared across swathes of Britain.
After imposing the most onerous restrictions in Britain’s history, Johnson is now keen to avoid becoming the first leader since Oliver Cromwell in the 17th century to cancel Christmas, even though the United Kingdom has the sixth worst official COVID-19 death toll in the world.