Just over one week ago, the GBPEUR exchange rate had hit the best price in over a year with hopes that a new Brexit deal was ready to be done- these hopes were quickly broken following the PM’s cabinet actually approving the deal with several high profile resignations in Parliament. There have also been a few calls for a vote of no confidence with some letters actually going in- right now it is unknown whether there are enough letters to trigger this or not.
Over the weekend, the PM has been actively promoting her deal around the country to gain support- and it seems that many members of Government are willing to back the PM, but after making some changes to the current deal.
Right now, it is pretty unclear where things will go from here- the potential scenarios we have are as follows-
- The UK & EU make their deal, and it is approved by House of Commons (Sterling strength)
- The UK & EU make their deal, and it is voted down by the House of Commons- potentially triggering a vote of no confidence in Theresa May (Sterling weakness)
- An immediate vote of no confidence (Sterling weakness)
- Changes to the deal being made, and then being presented to the EU (Sterling strength)
These are immediate scenarios- of course, there are more depending on what happens with this current deal plan- but it is impossible to forecast right now with limited information.
Unfortunately, economic figures are irrelevant while this is happening- as the Pound will only move on political news- so if you have an upcoming transaction please speak to us about methods to hedge yourself against the volatility in the market.