‘No Deal’ Brexit fears grow as Boris leads leadership contest
If you’re looking for a Euro rate forecast, it may interest you to know that Brexiteer Mr. Boris Johnson leads the race to become the next British Prime Minster at No. 10. This week we have seen the Pound fall to 1.1150 for the first time since 11th January, before bouncing back today to highs of 1.1217.
Although Boris Johnson appears to be a clear favourite amongst his peers and most likely to be appointed as the Tories’ next leader, investors fear his policies will be the most disruptive to Brexit negotiations. This is because Mr. Johnson remains intent on delivering Brexit at all costs by the 31st October.
With the EU insisting they will not be willing to reopen negotiations, it makes a Brexit ‘No Deal’ a real possibility. This is something that Mr. Johnson refuses to rule out.
Leadership contest: Second round of voting this evening
MP’s are due to partake in the second round of voting this evening, at 18.00 BST. Further rounds of voting will take place over the next few weeks, until they have whittled it down to the final two candidates. The final vote and announcement will be by the end of July.
Almost from nowhere, International Development Secretary Rory Stewart looks like the one most likely to challenge Boris Johnson until the end. Mr. Stewart is probably the one candidate who is prepared to put the clearest day light between himself and Mr. Johnson. Mr. Stewart has also been openly confident in criticising his Tory rivals, in his attempts to win the top job.
Mr. Stewart has argued that it is unrealistic to believe that the UK could get a new Brexit deal agreed with the EU by the new 31st October deadline. The International Development Secretary thinks that the best way to get a deal through is to try and push through the current deal previously presented by Theresa May, with possible amendments. He thinks that a ‘No Deal’ Brexit would be catastrophic for the UK and is undeliverable and unnecessary.
Should I buy Euros now or wait?
The cloud of uncertainty that continues to hover over the UK is likely to remain for the foreseeable future. With this, the Pound is likely to continue its struggles against the Euro, until hopefully some nerves can be settled. For this, a ‘No Deal’ Brexit needs to be the least likely eventuality by the 31st October.
Only five weeks ago, the Pound reached its highest levels of 2019 at 1.1776. This is when rumours gathered pace that cross-party Brexit talks were drawing to a positive conclusion. Although these rumours came to nothing, it showed that, if and when a deal can be agreed, the Pound will likely make gains towards 1.20.
However, the longer the UK goes without a deal in place, the Pound could continue to head towards Brexit lows of 1.07.
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