UK PM Johnson makes a promise to find a solution to Brexit’s Northern Ireland Protocol

In an article recently published by Bloomberg, the IK's PM Boris Johnson has been quoted saying "we'll fix" Brexit’s Northern Ireland Protocol, in a sign that a compromise will be reached with the E.

''UK Prime Minister Boris Johnson promised to find a solution to Brexit’s Northern Ireland Protocol, a sign that a compromise will be reached with the European Union in a dispute that had threatened to spiral into a trade war,'' the article read, quoting further comments as follows:

“Is there a problem with the Northern Irish protocol? Yes there is -- but we’ll fix that,” Johnson said in an interview with Bloomberg News’s editor-in-chief, John Micklethwait, on Monday. “I don’t think that’s going to be the end of the world.”

Market implications

GBP price action is far more centred around the Bank of England at the moment. 

GBP steadied near a 20-month high versus the euro on Monday after Bank of England Governor Andrew Bailey sent a fresh signal that the central bank is gearing up to raise interest rates as inflation risks mount.

GBP/AUD has added around 5.5% this year as traders price in the BoE and the prospects that the Old lady will be one of the first central banks to raise rates as a major factor supporting the pound.

However, there are concerns that the BoE will be cutting off the nose despite the face as the British economy has struggled with a shortage of labour, an energy crisis and rising COVID-19 cases of late. Some of these factors have been leading to inflation but the concern is for stagflation. With that being said, it's a dilemma for global central banks in general as supply chain disruptions sweeping major economies have reawakened an old nemesis for them.