Britain’s pound steadied from two straight weeks of losses against the U.S. dollar this morning after further hints the government is looking at ways to smooth its exit process with the European Union.
Trade minister Liam Fox said on Sunday Britain may need a transitional agreement to bridge the gap for businesses during negotiations with the EU, but it should not “buy back” into too many of the bloc’s regulations.
Prime Minister Theresa May first hinted at the idea – which has since been backed by finance minister Philip Hammond – last month. May is due to make a statement to parliament on last week’s EU summit at 1530 GMT.
Sterling edged up against the dollar to $1.2490, having last week ceded ground against a greenback bolstered by the prospect of faster-than-expected U.S. interest rate rises next year.
December can be a dangerous month and sterling remains very sensitive to political events.
With May not invited to a meeting between the other 27 EU national leaders after last week’s summit, it is unclear what sort of feedback on the process the prime minister will be able to offer parliament today.
She might be further pressed on media reports, quoting the EU’s envoy, that it would take up to 10 years for Britain to negotiate a new trade deal with the EU.