Pound Plummets FTSE 100 Up On Assume No Deal Brexit

The pound dropped to its lowest in 3 years today against the dollar at £1=$1.2339 after Michael Gove, the person in charge of planning for no-deal, confirmed that government is currently "working on the assumption" i.e. the government already assumes that it will be a 'No Deal' Brexit.

Meanwhile, Prime Minister, Boris Johnson remarked that he will 'hold out a hand' to the EU to try and re-negotiate a deal and will go "the extra thousand miles" as the existing deal is already "dead" given that it failed to get through Parliament three times.

The € was up above 90p at 0.9012 GBP or in our language, you may get £1 = €1.10 when you go on holiday as the £ weakened against the €.

Comment

It is time for us to work torwards a 'no deal'.  Love it or hate it, you need to plan, whether that is life, business or investing.  An even weaker pound will make British exports even cheaper, so we cannot see how WTO rules will make it any different as the £ has already weakened by 20%, so a tariff of 20% for the EU or the USA increasing tariffs may not have that much effect on the cost of exporting British goods into the EU or North America.

For the time being expect FTSE 100 to stay high, but if news of any flexibility on a deal comes out of the EU, the £ will strengthen and FTSE 100 will fall back.