Tag: falls

Pound falls on reports UK could quit Brexit talks next week

Britain's Prime Minister Boris Johnson as fears grow Brexit talks could collapse. Photo: Justin Tallis/AFP via Getty Images
Britain’s Prime Minister Boris Johnson as fears grow Brexit talks could collapse. Photo: Justin Tallis/AFP via Getty Images

The pound slid on Wednesday, after a report that the UK government could pull out of Brexit talks as soon as next week if not enough progress has been made towards a deal.

Sterling had lost 0.8% against the dollar (GBPUSD=X) by mid-afternoon in the UK, trading just below $1.29. It shed 0.7% against the euro (GBPEUR=X), with the pound selling for $1.09.

The flight from sterling reflects investors fears’ Britain could face severe economic upheaval if no deal is reached. It would likely spark disruption and sudden new barriers to long-standing trade and other ties with most of Europe when the Brexit transition period expires at the end of the year.

Talks between negotiators are ongoing in London this week. The pound’s decline came after a source told Bloomberg the UK government was serious about threatening to walk out of talks over a trade deal next week.

READ MORE: Stocks mixed as US stimulus hopes endure despite Trump ditching talks

Last month UK prime minister Boris Johnson set a deadline of 15 October for reaching an agreement, in order for it to be signed off and put into place by the start of next year.

Meanwhile Britain’s chief Brexit negotiator David Frost told MPs on Wednesday that barriers had not yet been overcome on one of the key stumbling blocks of state aid policy, according to Reuters.

WATCH: Boris Johnson says he can live with a no-deal Brexit

“I feel we’re some way from a deal at the moment, if I’m honest, but we are at least having a decent discussion of this, you know, what is possible and what isn’t possible,” he said.

Ireland’s foreign minister Simon Coveney also said on Wednesday that a “landing zone was hard to envisage” at present on another thorny issue, fishing rights.

“This is a big obstacle and I don’t think the British government should underestimate the strength of feeling on fishing of many of the Atlantic member states,” he said.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said fishermen’s demands on either side of the Channel “risk skewering a Brexit deal,” hitting sterling on Wednesday.

“Throughout the Brexit process, flotillas of British boats have made regular protest appearances, demanding priority catches for the fish in UK waters. But the EU’s determination not to throw the Common Fisheries Policy completely overboard, and instead netting continued access for its boats, is casting serious doubts that a trade deal will be reached,” she said.

“The EU stance appears to be hardening, leading to speculation that negotiations will now be forced to extend into November.”

Any concessions by either side are likely to “cause a stink for domestic politics,” but negotiators will be “highly conscious” of the economic damage from failure to secure a deal, she added.

READ MORE: UK and EU agree to ‘intensify talks’

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Demand for new cars falls to 21-year low, says Society of Motor Manufacturers and Traders (SMMT)

Demand for new cars fell to a 21-year low last month, industry data shows.

Some 328,041 new cars were registered in the UK in September, down 4.4% on the total of 343,255 during the same month in 2019, according to the Society of Motor Manufacturers and Traders (SMMT).

This was the weakest September performance since 1999 when new number plates began being issued twice per year, in March and September.

Sales of battery electric and plug-in hybrid cars bucked the trend with rises of 184.3% and 138.6% respectively.

READ MORE: SMEs in key subsea sector cut jobs amid slump triggered by coronavirus

Overall registrations during the first nine months of the year were down 33.2% compared with the same period in 2019.

SMMT chief executive Mike Hawes said: “During a torrid year, the automotive industry has demonstrated incredible resilience, but this is not a recovery.

“Despite the boost of a new registration plate, new model introductions and attractive offers, this is still the poorest September since the two-plate system was introduced in 1999.

“Unless the pandemic is controlled and economy-wide consumer and business confidence rebuilt, the short-term future looks very challenging indeed.”

The SMMT warned that the industry faces “myriad challenges” during the remainder of the year, including Brexit uncertainty, the investment required to develop zero-emission capable vehicles, and the difficulty in achieving climate change targets amid stalling demand for new cars.

It expects the number of new cars registered during the year as a whole to be around 30.6% lower than in 2019, which is equivalent to £21.2 billion in lost sales.

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