Sterling was under pressure this morning amid the continued uncertainty about the shape of Britain’s departure from the European Union.
With the governing Conservative Party torn on the type of arrangement the UK ought to seek after Brexit, the pound was flat against the US dollar and lower against the euro. It traded at €1.1154, a 0.11% decline, and $1.3119, unchanged on its closing price.
No agreed plan
One bright spot was sterling’s value against the yen, where it rose 0.01% to 147.9950 yen.
These are the latest sterling falls related to the Brexit uncertainty.
But it, too, is split between those urging a second referendum that would include the option of remaining in the EU and those opposed.
The UK is due to leave the bloc on 29 March next year, but with nothing close to a final deal with the remaining 27 members, there is confusion as to what will happen on that date. Prime Minister Theresa May and her colleagues continue to push the so-called Chequers plan, named after the country residence in which it was drawn up, under which Britain would adhere to a common rulebook with the EU for trade in goods and services, and would come to an arrangement under which customs procedures would be streamlined.
Free movement of people, a contentious issue in the UK, would end.
This proposal was rejected at an EU summit in Salzburg earlier this month, and a number of her fellow Conservative MPs have said they would vote against it in Parliament. Alternatives to the Chequers plan include a free-trade deal similar to that enjoyed by Canada, or a close association with the EU as is the case with Norway.
Shares shrug off uncertainty
A so-called no-deal Brexit would, some have claimed, mean lengthy delays in the movement of goods and people between Britain and the continent. Today, clothing retailer Next became the latest large company to say it was preparing for such a contingency.
However, stock markets were calmer, despite Labour’s sweeping plans, if elected, to extend what it calls democratic public ownership. Companies with more than 250 employees would have to allocate a third of boardroom seats to worker-directors. Firms would also have to transfer some shares into an “inclusive ownership fund”, managed by its workers and enjoying the same rights as other shareholders.
The blue-chip FTSE 100 Index was 0.2% higher this morning, at 7,473.6, while the FTSE 250 Index, more representative of domestic British businesses than the international FTSE, was 0.09 higher at 20,505.49.
Markets were higher also in Frankfurt, Paris, Amsterdam and Madrid. But, Wall Street closed mainly lower overnight, with declines in both the Dow Jones Index and in the Standard & Poor’s 500.
The tech-heavy NASDAQ index bucked the trend however, closing higher.