We have now passed the original deadline of 29th March and with two months now gone nothing appears to have really changed since then. European Council President Donald Tusk had appealed previously that the UK ‘please don’t waste this time.’ However, as we have seen during the last few months we do not appear to have got much closer to finding a solution.

Currency Pair% Change (Month)Difference on £200,000
GBPEUR3.2%$7,350
GBPUSD3.1%$8,100
GBPAUD3.1%AUD $10,140

The UK is now in the midst of a leadership election within the Tory Party after Theresa May recently announced her resignation. The aim is to have a new leader in place by in the next few weeks and meanwhile little progress on Brexit is likely to be made.

European Commission calls for deeper integration

The pound interbank rate is now trading closer to a 4-month low against the euro as investors are not confident that there is much optimism surrounding the UK at the moment.

In the meantime, the EU will be holding another summit on 20th-21st June but it is highly unlikely that the UK will know who will be in charge by then.

Even once the UK has a new Prime Minister in charge then typically Europe is on holiday for most of August so little change is expected to happen during this time. This will then lead us on to September which gives us just two months to get things organised by then.

Therefore, this is why I don’t hold too much hope that the Brexit will be resolved by then and why we could expect the pound to remain under a great deal of pressure during this time period.

The other problem for Brexit is that the new European Parliament will meet on 2nd July. A number of key appointments are due to be made including Presidents of the ECB, European Council and the European Commission. This is another reason why I think we will continue to make little progress on Brexit and why the pound may continue to struggle.

UK Housing data

On Friday the UK housing market showed a fall highlighting the problems within the sector. The Nationwide house price index showed a fall to 0.2% in April which demonstrates the uncertainty of the UK’s housing market. However, UK mortgage approvals saw an increase compared to the month before.

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