No deal threat undermines the pound and the FTSE

Fiona Cincotta
By :  ,  Senior Market Analyst
The latest comments and moves by Boris Johnson are making it clear that he is serious about leaving the EU by 31 October, most likely with no deal, and that he might be preparing to push back the Queen’s speech which marks the reopening of Parliament after the summer recess, until 1 November.

Long term, the deeper problem building here is not so much will the UK leave the EU or stay, but the fact that if no-deal happens it will undermine the Irish border and the agreements the UK has in place with Ireland, which could potentially threaten the whole structure of the United Kingdom.

Pound slips to 2-year low

The pound is in trouble this morning having fallen below a 2-year low against the dollar but the decline is helping some FTSE majors such as luxury brand Burberry and Rolls Royce.

The positive currency effect was not enough to hold the FTSE, which is now trading lower, dragged down by miners and supermarkets. Oil majors are also declining as oil prices – which are marginally higher this morning – took some losses over the last few days.

Sterling briefly fell below $1.24 and below EUR1.107 but then evened out to trade flat against the dollar and the euro. The next point of focus will be UK inflation data this morning which, if it falls short of expectations, could push the currency even lower.

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Related tags: Sterling UK 100

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