Pound at two-week high as rumours grow of Brexit talk progress
Liam Sheasby, News Editor
1 May 2019, 3:17 p.m.
The Pound Sterling has hit a two-week high value of $1.30690 today following news articles suggesting Theresa May will finally concede to Labour over their Customs Union requests.
The Pound is also currently worth €1.16382, though the Eurozone’s improved economic performance and slowing British factory growth have limited Sterling’s gains against the Euro.
The soft Brexit approach is likely to play badly with the eurosceptic ERG faction within the Tories, but the Telegraph reports that ministers were told by the Prime Minister that an “unpalatable” outcome is better than a “disastrous” outcome.
The customs union approach, proposed in the indicative votes by Ken Clarke, was the closest proposal to gaining a parliamentary majority. It’s believed that the softer approach will satisfy both sides; it’s Brexit, but without cutting ties to the EU entirely.
The danger for the Prime Minister is aggravating those anti-EU ministers, especially with the rapid rise of Nigel Farage and the Brexit Party. The group are already polling first for the European elections and look set to gain the largest number of MEPs ahead of Labour in second place. The Tories are languishing in third, closely followed by the new Change UK group and the Green Party. If the PM concedes to the leader of the opposition – a man who has been repeatedly labelled by May and her Cabinet as a danger to the country – then she risks both alienating her support base and driving voters to other parties, but also pushing MPs out and into the new, rival party.
The Times also reported a similar insight into the Labour/Conservative talks over Brexit, and the change of tone between this week and last is notable. Previously there had been rumours of talks being difficult and not making progress – rumours which helped the Dollar push the Pound down - but fast forward and the optimism has returned, and with it some investor confidence in Sterling.