- Posted by currencies in Bank of England, Brexit, coronavirus, No Deal, Sterling, UK, Uncategorised
- December 24, 2020
- No Comments
Sterling extended gains this morning and appears set for another push higher as traders waited confirmation that Britain and the European Union had finally clinched a deal to govern their trading relationship when the Brexit transition ends on Dec. 31.
There is yet no official confirmation of a deal, but sources say a deal is close as British Prime Minister Boris Johnson held a late-night conference call with his senior ministers, and negotiators pored over reams of legal texts.
While the pound and UK stocks have rallied strongly in recent weeks as optimism grew over a last-minute deal, the consensus is most UK assets remain undervalued and will gain further once a deal is confirmed.
The Brexit deal hopes to have pushed UK 10-year government borrowing costs more than 10 basis points higher.
The market has since stalled as it awaits confirmation of a deal and given the pressure on the UK economy from Brexit and coronavirus-linked lockdowns.
The British government said huge swathes of England would be placed under its strictest COVID-19 restrictions as a highly infectious virus variant sweeps the country, pushing the number of cases to a record level.
Britain reported almost 40,000 new infections as the mutated variant of the coronavirus, which could be up to 70% more transmissible than the original, causes the number of cases and hospital admissions to soar.
The number of recorded deaths – 744 – was also the highest figure since April.
Hancock said there was on average 1909 COVID hospital admissions a day, with 18,943 people currently in hospital with the coronavirus, levels not seen since the peak of the first outbreak in April.