The Wobbling Pound and the EU

Boris Johnson is not only back from the cold, but he has also delivered a new twist for Brexit and the Pound.

If there were any doubts on where Boris Johnson sits in terms of deal or no-deal, his first week in office will have brought clarity.

It’s all systems go for the British PM, who was one of the instigators of the EU Referendum.

Johnson has now made his threats to the EU. Not only has Johnson stated that no further talks will occur until the backstop is removed, but has now also threatened to withhold the £39bn divorce bill.

Judging by the EU’s response to the latest threat, there appears to be more interest in the money than ensuring an ongoing relationship with Britain.

EU Budget Commissioner Oettinger responded in kind, saying that it would affect the UK’s credit rating. An interesting statement when considering the fact that the rating agencies will need to decide on that one.

It’s certainly getting heated, not only in Britain but also across the EU.

When a UK Prime Minister has a simple goal of taking Britain out of the EU, the negotiating tactics are certainly different.

With the support of the U.S President and interest from other growth economies around the world, the EU could end up on the wrong side…

Brexit and the UK economy

There’s plenty of scheming in the corridors of power, as the pro-remainers look to block a no-deal Brexit. With Johnson in power and Parliament in summer recess, a snap election may be too late for the no-Brexiteers.

Johnson’s call for the country to prepare for a no-deal Brexit will pressure the economy through the summer.

Economists have said that the UK economy is already in a recession. Battening down the hatches over the summer is going to do the economy and the Pound few favors.

How the BoE responds on Thursday will be particularly interesting. Ruffling the EU’s feathers within the 1^st week suggests that negotiations are unlikely to be fruitful. Unless the EU is willing to risk the very existence of the EU.

Any last-minute concessions to the UK would surely inspire other anti-EU parties to follow suit. The Pound is certainly under the hammer today. The EUR may not be far behind, however, particularly if Britain holds back on the divorce bill.

The Pound

At the time of writing, the Pound was down by 0.34% to $1.23384. The slide comes as no-deal Brexit pressure mounts.