Sterling suffered more losses after Boris Johnson pushed The EU back stating The UK were prepared to walk away from Trade Talks in June if enough progress wasn’t made. These comments came after Brussels warned the UK, they faced a tough road ahead. With Trade Talks set to start Monday, there a few key areas where The EU & The UK seem miles apart. The UK fishing waters, a level playing field trade agreement and jurisdiction from the European Court of Justice are just 3 of the area’s that are causing pessimistic opinions on whether this Trade Deal can be agreed by December 2020. With the deadline of June to request an extension getting ever closer, the prospect of a No Deal Brexit is becoming even bigger and can only bring more negativity for GBP.
Friday morning brought more losses for Sterling after Bank Of England governor Mark Carney stated Britain should prepare itself for an economic downgrade, with the impact of the Coronavirus Outbreak deepening day by day. Although The UK has seen positive figures in the jobs market and household debt falling since the turn of the year, as well as real wages rising, productivity is still slow and it is inevitable that this could get worse throughout the next quarter if the global economy continues to feel the strain from this outbreak.
The Global economy is on course to suffer its worst performance since the financial crisis more than a decade ago, due to the outbreak which is now putting pressure on Europe, The U.S and the UK. It is increasingly likely that all 3 economies will cut interest rates within the coming months. Odds have increased across the board, starting with a U.S Rate Cut in the March meeting, Bank of England looking set to cut in May at the latest and The ECB more likely to cut in July. These cuts may well happen earlier, it all pretty much hinges on the developments around Brexit & the Coronavirus Outbreak.