Brexit Outlook and Sterling (GBP/USD) Price, Analysis and Chart:
- Brexit talks remain stalled as the mid-November deadline nears.
- UK PM’s handling of lockdown 2.0 under scrutiny.
The fundamental outlook for Sterling remains negative with price action pointing to the downside unless EU-UK trade talks can finally produce some positive headlines. This week started with a dose of optimism that common ground had been found on fisheries but commentary from the EU at the end of the week denied this and reiterated that major differences between the two sides remain. According to reports, UK PM Boris Johnson wanted to meet EU leaders to try and resolve the current situation, effectively sideling EU chief negotiator Michel Barnier, but his plans were rejected. The EU has a November 15 deadline for a trade deal to be struck so it can be ratified by the end of the year.
The end of the week saw UK PM Johnson’s credibility take a further blow when the latest YouGov poll showed Labour opening up a five-point lead over the Conservatives. The poll showed headline voting intention favor Labor by 40 to 35, while Sir Keir Starmer was seen as the best choice as Prime Minister by 34 to 29 percent.
The Bank of England this week left interest rates unchanged but ramped up the UK bond-buying program by much more than expected as the UK economy looks set to fall into a double-dip recession. Another GBP150 billion was added to the QE program, compared to analysts’ expectations of GBP100 billion, boosting the program up to GBP895 billion in total.
Bank of England Ramps Up QE Program, Rates Left Unchanged, Sterling Pushes Higher[1]
The UK went into lockdown 2.0 this week with the government, and their scientists, being put under scrutiny over the
