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Pound falls to lowest level since flash crash on Brexit worries
UK prime minister Theresa May has previously stated that she doesn’t recognise the concept of a ‘hard Brexit’ the market clearly does. Comments by Theresa May hinting at a hard Brexit sent the pound lower over the weekend. May has stated on several occasions that she will prioritise regaining control of the UK’s borders and laws over access to the single market.
While the prime minister hasn’t gone so far as to plainly state the potential impacts of such an arrangement, her broad aims for post EU-Britain have been consistently clear for some time now. The commonly heard ‘uncertainty’ about May’s intentions is hard to justify.
UK and EU27 are expected to agree a deal in which the UK maintains a good level of access to the EU’s goods markets and limited access to the less developed services markets. Crucially, UK is set to lose its EU financial services passport, which is one reason why, financial shares are coming under renewed pressure.
Looking ahead, the pound is likely to remain vulnerable, in the short term.