Over the last 18 months, UK and EU negotiators have been trying to come to an agreement in regards to the Irish border. It was announced at the back end of last week that UK Prime Minister Theresa May plans to change her ‘back stop’ agreement which will keep the whole of the UK in a ‘temporary customs arrangement’ and not just Northern Ireland, whilst the UK and EU continue to negotiate in the years to come. This will only be the case if the UK and EU do not agree a deal in the next 6 weeks. Brexiteers could see this a betrayal by the Prime Minister, as they may believe that the UK have remained part of the customs union in all but name and this could cause a problem for future global trade talks.
|Currency Pair||% Change in 1 month||Difference on £200,000|
The Prime Minister will reveal the plan at the October EU summit on the 18th and all eyes will turn to the EU. If Brussels agree to the UK's plan, the UK and EU will have the transition period (2 years as of March 29th) to renegotiate another Irish border deal that works for the UK and the EU.
In my opinion, I think this is the PM's last hope of a deal being agreed with the EU in regards to the Irish Border. Quite clearly, she has completely backtracked from her original plan and has arguably put us back where we started (within the common market). If the EU agree to the new proposal Theresa May has still got to get the backing from the full Conservative Party and this could be another hurdle to overcome. Overnight, some Brexiteers warned the Prime Minister that she must agree with the EU that Britain will leave the customs arrangement by the next General election in 2022.
My predictions over the last 18 months have not changed. I expect a deal to be secured in November. However, if the PM fails to agree a deal, I only foresee one other outcome and that is a vote of no confidence and therefore a general election in 2019. For clients that are buying or selling sterling, now is the time to make a plan. I strongly recommend outlining your position to your account manager and together you can formulate a strategy that works for you. Expect major volatility for the remainder of the year.
Brexit negotiations I believe will be the main talking point for sterling exchange rates this week, however there are a few releases to keep an eye on. Wednesday at 09.30 the UK release their latest GDP numbers. The consensus is for GDP to contract to 0.2% from 0.3%. If this is the case you should expect the pound to devalue slightly.
First rate service from Dayle Littlejohn in dealing with our transaction from Cyprus. He kept us updated at all times and we appreciated his sincere manner.
First class foreign currency provider, great rates and outstanding customer service.
Great service very professional but with a personal touch. Everything went smoothly with no fuss. Would highly recommend.