Pound plummets against dollar and euro as Boris Johnson prepares for No Deal Brexit in 48 hours
THE pound has plummeted against the dollar and euro as Boris Johnson prepares for a No Deal Brexit in 48 hours. Talks currently remain stuck, with the PM set to hold another emergency call with EU boss Ursula Von Der Leyen this evening about how to proceed. Both sides are stuck over crucial issues of fish, […]
THE pound has plummeted against the dollar and euro as Boris Johnson prepares for a No Deal Brexit in 48 hours.
Talks currently remain stuck, with the PM set to hold another emergency call with EU boss Ursula Von Der Leyen this evening about how to proceed.
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Both sides are stuck over crucial issues of fish, sticking to EU rules after we leave, and who decides how to resolve key disputes.
Time is now running out to secure an agreement before the end of the transition period on December 31, when Britain will leave behind huge swathes of EU rules and regulations.
If Boris Johnson decides the gaps cannot be bridged, the PM may push ahead with plans for a No Deal Brexit within days.
The news has affected the pound, which has slumped 1.24% against the euro and is also down 1.32% against the dollar today.
What is a No Deal Brexit?
A NO Deal departure from the European Union means leaving without formal arrangements for the future relationship.
While Britain was part of the EU, its trade, customs and immigration rules were tied up with the single market and a host of EU regulatory bodies.
At 11pm on January 31, 2020, Britain left the EU, leaving a transition period of 11 months for the EU and Britain to draw up and agree on the details of a deal.
The transition period will end on December 31 2020, but talks between the two sides are still gridlocked.
At the time of writing at 12.30pm, £1 would give you €1.09 or $1.33.
Neil Wilson, chief market analyst for Markets.com, said: “Sterling-risks to Brexit no-deal endgames were exposed this morning as the chatter was less optimistic than many of us thought it would be.
“Moreover, confusion over progress on fishing has clearly unnerved the market.”
In March, the pound crashed to its lowest level against the US dollar since 1985 due to the coronavirus crisis.
At the time, the pound’s poor performance against its US counterpart was not due to volatility in the UK currency but because of a strong dollar.
The crash came as the pandemic started spreading across the globe in the spring, with more than 199,000 confirmed cases worldwide.
In comparison, there are currently almost 67.5million confirmed cases across the globe.
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The pound also plummeted in September after the Bank of England hinted that it could implement negative interest rates.
At the time, the bank said that it planned to “explore how a negative Bank Rate could be implemented effectively” but only if inflation and GDP didn’t continue to improve.
Banks and building societies use the base rate to set its own interest rates on savings and loans.