Pound rebounds from six-week low, as markets rally – business live | Business

Pound rebounds from six-week low, as markets rally – business live | Business

The UK can ill afford the negative turn that Brexit negotiations have recently taken. At a time when economic data is once again starting to paint an increasingly grim picture and infection numbers have returned to levels high enough to warrant renewed restrictions on social gatherings, the latest astonishing Brexit headlines will not go unnoticed.

“UK assets may look somewhat relatively attractive on a valuation basis, but global investors would do well to avoid this value trap. Sterling may have fallen below $1.30 for the first time since July, yet with a no-deal Brexit and a round of political rebellions on the way, the pound has materially further to fall. As Jean Claude Junker noted yesterday, a no-deal appears to the most likely outcome and the negative consequences will be felt in both the UK and EU – yet it seems that the UK will likely suffer the ramifications for a great deal longer than the EU.

“What’s more, with the government admitting that they will break international law over the Brexit treaty, this will inevitably weigh on future trade negotiations as countries question the UK’s credibility and honesty. For the moment, despite the falling value of UK assets, many international investors will continue to give them a wide berth.”

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