MUFG Research discusses the latest Brexit developments this week.
“The pound has softened at the start of this week with cable falling back towards support at the 1.3000-level. Understandably, it reflects a little more nervousness that the UK could exit the EU at the end of this week without a deal. Cross party talks between the Conservative party and the Labour party broke down at the end of last week with Labour claiming that PM May was not willing to soften her red lines in order to reach a compromise deal. However, there appears to have been a thaw in relations over the weekend, and talks are expected to resume today,” MUFG notes.
“PM May is hoping to have a political agreement in place with Labour leader Corbyn on the political principles underpinning the UK’s withdrawal ahead of the EU’s Leaders’ Summit on Wednesday. It would support her request to extend Article 50 to the end of June with a potential break clause to allow the UK to leave before the EU elections are held in May if they can pass the required legislation through parliament in time. However, it remains far from certain that the cross party talks will succeed,” MUFG adds.