Saturday, March 25, 2023

Pound Falls on Lockdown, Brexit Fears By


© Reuters.

By Yasin Ebrahim – The pound fell sharply Tuesday as concerns about a no-deal Brexit and fears over a looming lockdown hurt sentiment.

fell 0.95% to $1.2940.

The possibility of the UK leaving the EU without a trade deal is a “credible hypothesis,” French foreign minister Jean-Yves Le Drian reportedly said Tuesday, according to media reports.

The stark warning that a hard Brexit could be in the offing when the transition period ends on Dec. 31 comes as the French government appears reluctant to give in to UK demands over control of its fisheries.

“We will not accept a bad deal and a bad deal in fisheries in particular,”  said Clément Beaune, a close ally of French President Emmanuel Macron, The Wall Street Journal reported. “We will have no weakness on this issue of fisheries, that is clear.”

The uncertainty over deal comes just days ahead of the Oct. 15-16 European summit, during which EU Brexit negotiator will provide an update on Brexit negotiations.

“The EU summit will now be seen mainly as the point where chief negotiator Barnier updates leaders on key sticking points, with a chance to agree on priorities and red lines,” Action Economics said.

The pound was also hurt by fears the UK is headed for another lockdown following a spike in coronavirus cases.

The Financial Times cited two leading government advisers touting the idea of a two-week lockdown during the school break from Oct. 24 to Nov. 7, to prevent thousands of deaths.

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