09/06/2021

Market report: Brexit tensions weigh on pound


GBP


Sterling continued its descent against the euro and dollar on Tuesday as investors soured on the currency.

This follows EU threats to impose sanctions on UK exports to Northern Ireland. The bloc’s stated they’re willing to act “firmly and resolutely” if the UK reneges on its commitments to implementing the Northern Ireland protocol. The warning was sent by Maros Sefcovic, the European Vice President, in a Daily Telegraph article.

The flare up concerns the sale of chilled meats being sold into Northern Ireland from the UK under the terms of the Norther Ireland protocol. A ban will come into force if the UK and EU cannot agree to new regulatory standards to cover the sale of processed meats before July 1st 2021.

The UK government have already expressed a desire to extend the grace period further without consulting the EU. The move didn’t go down too well and resulted in Sefcovic threatening regulatory tariffs. To make matters worse, reports have suggested Joe Biden could also warn Boris Johnson against reneging when they meet at this weekend’s G7 summit. 

UK and EU counterparts will meet today to try and strike an agreement. The EU have already briefed the press  they’re willing to make concessions but patience is wearing thin. Expect more volatility until a solution is found

Key announcements

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