It’s a new day on the financial markets, yet the fall of the British pound sterling continues in full force. Some economists are even beginning to talk about a possible parity between the pound and the American dollar.
The Prime Minister of the United Kingdom, Boris Johnson, has somewhat petulantly announced that he would not negotiate with the European Union unless the Irish backstop clause is removed from the Withdrawal Agreement. The EU, on the other hand, has been upfront about not changing the agreement since Theresa May was still occupying the post of PM. Johnson has been in office almost a month now and has not even begun talks with the EU, despite the Brexit deadline being less than 3 months away and the fact that the United Kingdom has no exit plan at the moment.
With Johnson’s repeated promises that the UK will leave by the October 31 deadline, it appears that the PM has already taken no-deal to heart and is not interested in exploring other options.
This shows in the weakness of the pound, which has shed 7% of its value over the last couple of months alone. Since this May alone the GBP/USD fell from 1.31 to 1.21. Now economists from the Bank of England, Morgan Stanley, and selected hedge funds are coming up with forecasts that the sterling could drop to $1.
