UK Prime Minister Theresa May faced further problems yesterday when she suffered her worst defeat in the commons, this was the worst defeat for any Prime Minister in 40 years.
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Parliament voted that the Government must release the legal advice given to the cabinet in regards to Brexit. Furthermore they also voted that the Government will have a say if Theresa May fails to get the deal through on the 11th December.
For clients that are buying or selling the Pound in the coming months, it’s important to understand that Sterling currency pairings are set to face extreme volatility.
Governor of the Bank of England Mark Carney in recent weeks has warned that GDP could fall by 8%, the housing market could fall by a third and Sterling could fall 25% if the UK crash out of the EU with no deal.
Quite simply, yes! If you are planning a currency transfer in the short, medium or long term, today is the day to get in touch with your broker to discuss a strategy.
There are two outcomes that could materialise on the 11th December. Either Theresa May gets a deal through Parliament, which is likely to help the Pound gain value against the major currencies, or Theresa May fails to get Parliaments approval, which could cause the Pound to crash and then anything could happen.
In my opinion I believe Theresa May’s position as Prime Minister will be coming to a close as she has run out of time and her plan quite simply does not cut it with MPs. Short term I expect she would try to renegotiate with Brussels but the likelihood is she will not get further concessions which therefore would lead to her resignation. Hardline Brexiteers will feel that a hard Brexit is more likely, but then at the same time remainers will feel that a people's vote could be on the cards. Either way, the uncertainty will cause problems for the Pound and I expect Sterling will hit multi year lows.
If you are planning on making a currency transfer which involves buying or selling Pounds and you have budgeted on current levels, anything could happen therefore the safe option is not to gamble and get something purchased before December 11th.
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