Pound Hits 4-Month Low As Talks With Labour Collapse

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The pound weakened again on Friday, touching fresh four-month lows, as a No. 10 spokesman revealed that talks with Labour had ended without reaching a Brexit deal.

Sterling slips 0.4% to $1.2752, the lowest since Jan. 15.

Pound

Bloomberg reported that divisions in the Labour Party over support for a second referendum, as well as the government’s unwillingness to offer any meaningful concessions, contributed to the collapse of talks, which many had expected.

During a campaign event in Bristol, Theresa May blamed the pro-second referendum faction within Labour for crashing the talks.

“As Jeremy Corbyn says, actually these talks have been constructive and we’ve made progress. There have been areas where we have been able to find common ground. But other issues have proved to be more difficult. And, in particular, we haven’t been able to overcome the fact that there isn’t a common position in Labour about whether they want to deliver Brexit or hold a second referendum which could reverse it.”

“So when we come to bring the legislation forward, we will think carefully about what we’ve had with these talks, the outcome of these talks. We will also consider whether we have some votes to see if the ideas that have come through command a majority in the House of Commons. But when MPs come to vote on the bill, they will be faced with a stark choice; that is, to vote to deliver on the referendum, to vote to deliver Brexit, or to shy away again from delivering Brexit with all the uncertainty that that would leave.”

Either way, investors are avoiding the pound until more becomes certain. No. 10 said it wasn’t clear whether there would be enough support to hold another round of indicative votes.

“It looks like investors are avoiding the pound until there is more clarity,” said ABN Amro strategist Georgette Boele.

The pound has been declining all week as talks with Labour appeared increasingly fraught, and as Tories pushed May to set forth a timetable for her resignation. The prime minister has reportedly agreed to leave shortly after holding a fourth vote on her withdrawal agreement.


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