Euro hits 90p: Concern over no-deal Brexit sees Sterling slump
Sterling has slumped half a percent against the euro to below 90 pence, its weakest since the middle of November in a selloff fueled by investor concern that Britain will crash out of the European Union without a trade deal..
London-based traders said investors had moved to hedge against the currency’s going into free fall if Britain drops out of the EU with no deal in less than eight months’ time.
Sterling was down against the euro, dollar and Swiss franc, suggesting the negative sentiment was broad. Three-month sterling volatility rose to its highest since March.
Analysts said the pound was also hurt by a growing realisation, after the Bank of England’s monetary policy meeting last week, that interest rate increases were likely to be as limited as one a year and contingent on a smooth Brexit.
Investors appear to view a no-deal Brexit as a growing possibility, especially after Britain’s Trade Minister Liam Fox suggested over the weekend that the likelihood of a no-deal outcome is as high as 60pc.
The Irish Farmers' Association (IFA) has said that its members are concerned about the lack of progress and clarity on what the outcome of the UK's withdrawal from the European Union next year will be.
Amid mounting fears that talks are continuing with no substantial progress, raising fears of a no-deal Brexit, farmers here have called on the Government to hold the EU to its promises that the impact on agriculture in Ireland would be minimised.
"The task for the Taoiseach and the Government is to hold the EU to its position and guarantee that Irish farmers are not exposed in the final outcome," a spokesman for the IFA said recently.