Pound wobbles as Johnson says get ready for ‘no-deal’ Brexit
17 Oct 2020 – 9:10
Traffic passes over the River Thames on Tower Bridge in London during the morning rush hour on October 15, 2020. AFP / Daniel Leal-Olivas
New York: The British pound wobbled Friday, boosting London stocks, after UK Prime Minister Boris Johnson warned he was ready to walk away from European Union trade talks and prepare for a “no-deal” Brexit.
Sterling fell below $1.29 before crawling back after Johnson accused the EU of failing to negotiate seriously — and declared Britain should “get ready” for an Australia-style agreement based on World Trade Organization rules from January “unless there is a fundamental change of approach” from Brussels.
A Johnson aide ramped up the rhetoric by adding that trade talks were over unless Brussels “fundamentally shifts its position.”
Their comments came after an EU summit this week demanded Britain urgently give ground on fair trade rules to unblock post-Brexit negotiations.
“Sterling fell sharply on comments from PM Boris Johnson calling for the UK to prepare for a no-deal exit in January and accusing the EU of not negotiating seriously,” said Markets.com analyst Neil Wilson.
Analyst Craig Erlam at Oanda commented that “the market is broadly taking it for what it is, one final push at concessions from the EU.”
But he added: “It would be terrible for all of this to end without a deal after four years of work and in the midst of a pandemic when businesses are already pushed to the brink.”
Johnson’s comments helped propel the London stock market 1.5 percent higher at the close, but Wall Street ended in an uninspired fashion with the Dow gaining 0.4 percent and the Nasdaq slumping by the same amount.
Virus restrictions cloud outlook
A devalued pound