No Brexit deal means ‘10% drop in sterling’
Sterling could relapse by almost 10% against the dollar if a “no deal” Brexit becomes likely, keeping investors wary of buying UK assets, Northern Trust Asset Management said.
Northern Trust’s EMEA and Asia-Pacific chief investment officer, who helps manage around €857m in assets, told the Reuters Global Investment Outlook Summit the UK crashing out of the EU without a trade deal in place could mean sterling would be hit again.
Against the euro, sterling fell 0.65% to almost 90 pence at one stage as investors worried about the stability of UK prime minister Theresa May’s government.
She needs to speed up negotiations with the EU, business leaders from across Europe, including Ibec’s Danny McCoy, told her at Downing Street amid concern Britain will crash out the world’s biggest trading bloc without a deal. “Business is extremely concerned with the slow pace of negotiations and the lack of progress,” said Emma Marcegaglia, president of BusinessEurope, a lobby group for companies in European countries, including Britain.
“The message to the UK government was clear, business is increasingly frustrated and concerned at the lack of progress in negotiations.
“To move past the first phase of talks, which covers Ireland, the financial settlement, and citizens’ rights, we need practical solutions and firm commitments, not just rhetoric,” Mr McCoy said.
British shoppers reined in their spending by the most in more than four years in October, according to a survey by Visa which added to other signs that the squeeze on UK incomes is hitting consumer spending.
Reuters and Irish Examiner
