GBP: Guided by UK politics – Rabobank

The UK pound remains under pressure by a Politicio report that EU negotiator Barnier has flatly rejected PM May bid for a “bespoke” trade deal and has insisted that only a “standard” free trade agreement is possible, according to analysts at Rabobank.

Key Quotes

“The latter would reportedly offer “no direct branching in areas like financial services” and only “limited EU commitments to allow cross border provision of services”.  The news follows a separate report that EU leaders are expecting the UK to make a new offer of the size of the Brexit divorce bill and another that Chancellor Merkel is said to be wary about pushing PM May too far in view of the potential consequences of weakening her position further at home.  This week the UK parliament has been debating the EU Withdrawal bill. So far the government has won every attempt to amend the bill, despite its majority slipping as low as 12 on one occasion.  However, the government could run into trouble once the issue of fixing an exit date into UK law is discussed.  Six more debating days are expected before the bill can complete the committee stage. These are likely to be set later today.”