Bookmakers altered the odds of a Brexit from 29 per cent to 33 per cent and the price of insurance against devaluation soared to a four-year high in the options markets yesterday, as banks repeated their warnings that sterling could slump as low as $1.20 if Britain quits the single market — a level not seen since 1985.
Fears of the consequences of a Hard Brexit have sent the pound tumbling to a new 31-year low against the dollar, reports The Independent.
Speaking at the Conservative Party’s annual conference in Birmingham on Sunday, Theresa May has ended weeks of speculation and revealed that she will launch formal Brexit talks with EU leaders before the end of March 2017. The timing means the UK looks set to leave the EU by summer 2019.
LONDON: Sterling powered to its strongest in 7-1/2 years against a trade-weighted basket of currencies on Tuesday, as better-than expected UK inflation data bolstered bets that the Bank of England will raise interest rates in the coming months. The numbers from the Office for National Statistics showed consumer prices rose 0.1 per cent in July, beating expectations that inflation would remain stuck at zero. Core inflation, which strips out food, energy, alcohol and tobacco prices, hit a five-month peak of 1.2 per cent, up from 0.8 per cent in June.
By Tom Lydon:
With the British economy teetering on another recession, market observers are anticipating new stimulus measures from the Bank of England, driving the British pound currency, along with a related exchange traded fund, to a three-year low.The CurrencyShares British Pound Sterling Trust (FXB) dropped 4.4% over the past three months.
Tokyo (AFP) - The British pound surged to a more than two-year high against the euro Friday, while it also rallied against the dollar as early results suggested Scotland will vote against independence from the United Kingdom.
LONDON: Sterling rose against the euro on Monday, buoyed by comments from Bank of England policymaker Kristin Forbes that reinforced expectations British interest rates will rise in coming months. Forbes, a US academic on the BoE's nine-member monetary policy committee, wrote in the Daily Telegraph: "Interest rates will need to be increased well before inflation hits our 2 per cent target.