UK: Raab rocks GBP - ING

After rallying on a brief period of optimism on the scope for a soft Brexit, GBP has today been hit hard by the resignation of Dominic Raab, the Brexit secretary, points out the research team at ING.

Key Quotes

“His resignation letter referenced two key concerns of the Withdrawal Agreement recently negotiated between London and Brussels, namely: i) the threat to the integrity of the UK posed by the proposed regulatory regime for N.Ireland and ii) the EU holding a veto over the UK’s ability to exit the back-stop of a customs union.”

“For the Brexiteers, the withdrawal deal offers too many concessions to Brussels. For the Remainers, they reject the proposition that it is a question of this (bad) deal or no deal at all. They would prefer another referendum or at least a delay in Article 50 to allow more time to negotiate a better deal.”

“International investors now have to weigh up the chances of a leadership challenge against the Prime Minister, Theresa May, in addition to the (seemingly declining) chances of the withdrawal deal being approved by UK parliament in December.”