GBP: Guided by the politics – Danske Bank

Aila Mihr, senior analyst at Danske Bank suggest that the politics continues to dominate the news flow for the UK markets as after cross-party talks with Labour collapsed last week, the GBP hit its weakest level since February.

Key Quotes

“Over the weekend, embattled PM Theresa May promised to make a “bold offer” and set out a “new and improved” Brexit deal as she tries to pass her EU withdrawal treaty at the fourth attempt in early June.”

“Although the new offer is said to include improvements on workers’ rights, Labour leader Jeremy Corbyn is widely quoted as being sceptical of any deal passing and hence a June agreement is already facing headwinds.”

“On previous occasions the GBP would rally mildly on the news of a change in the impasse and this could very well happen again in the coming week. However, overall, we remain sceptical, as we see only a slim likelihood of the bill passing, after pressure on politicians to find a way forward has eased following the Brexit deadline extension.”