If you’re looking for Euro predictions, it may interest you to know that GBP/EUR has remained range-bound in today’s trading, as markets anticipate the imminent arrival of the UK’s new Prime Minister. If you’re to believe the bookies and media, it would take a brave person to bet against Boris Johnson winning this position.
There has been much speculation about how Boris may orchestrate the UK’s departure from the EU, and pressure will mount on Boris as soon as he steps into Number 10. However, we do know that he considers Theresa May’s Withdrawal Agreement obsolete, and feels that a new approach must be made. To date, Boris has only gone as far as to clarify the following points;
- To instantly protect the rights of the 3.2 million EU citizens living in the UK. This would be enshrined in UK law and so therefore it would be unnecessary to incorporate this in any withdrawal agreement.
- For the £39bn Brexit bill to be suspended whilst a free trade agreement is negotiated, although the UK would pay upfront during any transition period.
- For the Irish border issue to be resolved along the way, once we understand more about the type of trade relationship the UK will have with the EU.
- For the UK to fully prepare for a “no deal” scenario and for life on WTO trading terms, letting the EU know that the UK is prepared to walk away if need be.
To some, this may seem like a logical pathway but, to the EU, this will almost certainly be rejected. Boris Johnson infuriated the EU with his part in the Brexit process and with his “have our cake, and eat it” comments. So I struggle to see how the EU will be any more accommodating to Boris than they were to Theresa May.
Assuming Boris gets the keys to Number 10, pressure will quickly mount on the new Prime Minister to provide more information on his plan. Despite Boris Johnson’s promise to take the UK out of the EU by October 31st, the public are not convinced, with the latest YouGov poll showing that only 27% of the public believe this will happen. An overwhelming majority of 56% public saying they do not think we will have left. Also, 48% of Tory voters do not believe that the UK will have left the EU either.
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