Sunday 16 June 2019

Sterling in slump amid Boris no-deal posturing

Stock image: Yui Mok/PA
Stock image: Yui Mok/PA

David Chance

Sterling sank for a 15th consecutive day after Boris Johnson, the frontrunner to become Britain's next prime minister, said he was ready to leave the EU without a deal.

Mr Johnson was speaking after Prime Minister Theresa May said she would resign, ending a three-year term in office that had been dominated by the 2016 Brexit referendum.

The pound initially rallied after Mrs May's announcement she would leave office on June 7, but then turned down to extend its record-breaking run of losses against the euro.

"We will leave the EU on October 31, deal or no deal. The way to get a good deal is to prepare for a no deal," Mr Johnson said in a statement that would mark a significant hardening of the UK's position if he took office.

By the close of trading in London €1 was worth 88.26p as the British currency erased substantial gains made earlier this year and hit levels not seen since mid-January.

Any talks with Brussels on the terms of Britain's departure from the EU will now have to wait until a new Conservative Party leader is installed.

"The process itself reduces the time available to agree a Brexit deal by the October 31 deadline and therefore increases the chances of another delay, a no-deal Brexit and/or a general election and second referendum," said Paul Dales, chief UK economist at Capital Economics.

Paddy Power has Mr Johnson as the 5/6 odds-on favourite to win the Conservative leadership contest.

Investec, a specialist bank, said it now expects the pound to slump against the euro and is targeting 90p over the next few months as the political turmoil continues.

Irish Independent

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