UK: Concerns over Brexit negotiations - Westpac

According to Tim Riddell, Research Analyst at Westpac, UK officials and markets are likely to be far more concerned over Brexit negotiations in advance of a likely mid-Nov Brexit-specific EU summit.

Key Quotes

“Both EU and UK negotiators now appear keener to find compromise in order to overcome the final key obstacles of the Irish border and customs. Any signs of agreement should lift GBP in the interim.”

“UK politics and the problems of Westminster passing any agreement will be problematic. Labour and Conservative party conferences at the end of this month may heighten domestic Brexit tensions.”

“Last week’s BoE Agents’ Report (a key input for Bank policy) showed how Brexit uncertainties are now beginning to weigh on business intentions.”

“Near term GBP rebounds may occur on EU/UK negotiations but will likely be limited due to UK’s precarious domestic politics and so the 1.27-1.35 range is likely to persist.”