Monday 26 August 2019

Sterling surge fades due to Brexit impasse

Theresa May
Theresa May

David Chance

THE pound gave ground against the euro yesterday as hopes of an imminent Brexit deal agreement between the Conservative and Labour parties faded.

The currency surged 0.9pc to 84.98 pence to the euro, a new one-month high, after Labour leader Jeremy Corbyn called for a Brexit deal in the wake of shattering losses for both of the major parties in local elections. In afternoon trading yesterday a euro was worth 85.68 pence.

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"Despite more positive soundings, investors remain doubtful of a clear path to a deal that can gain a parliamentary majority. Unless and until we see a clear breakthrough, optimism for sterling is likely to be short-lived," said Lee Evans, Head of FX Trading and Strategy, Bank of Ireland.

Prime Minister Theresa May's leadership is under increasing pressure and Labour is pushing for a permanent customs union with the EU, something that has been rejected in the House of Commons in previous indicative votes. Mr Corbyn's deal-boosting comments were later undermined by sceptical remarks from his deputy, John McDonnell.

Keith Starmer, the shadow Brexit secretary, said yesterday that it was "crunch time" for the government to deliver on pledges to make a deal work, including how the agreement could be shaped to ensure that it survived a change of leader in the Conservative Party as Prime Minister May had pledged to resign once a deal is reached.

Irish Independent

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