Pound recovers on positive GDP figures and Brexit hopes

The Pound has continued to strengthen against the Euro this morning after the UK GDP figures surprised investors with a much a better reading of 0.3%, beating expectations. This coupled with growing optimism that the UK will not crash out of the EU without a deal boosted demand for the Pound and pushed GBP/EUR into the 1.12’s, heading close to a five-week high.

PM Boris Johnson met with his Irish counterpart Leo Varadkar for the first time today in Dublin. During this meeting they managed to establish some common ground on Brexit, but significant gaps remain.

It is also looking like PM Johnson will try to convince MP’s for a second time this evening to call a snap election but is set to be thwarted once again by opposition lawmakers. Rebel and opposition MP’s want to ensure the prime minister cannot take Britain out of the EU without an agreement in place.

“The threat of a no-deal Brexit has somewhat receded but has not gone away completely, which is reflected around current levels,” said Esther Maria Reichelt, a strategist at Commerzbank.

Prime Minister Boris Johnson failed to win enough support from lawmakers last week to call an early election whilst parliament also approved a bill which aimed to block a no deal Brexit at the end of October. This would force Johnson to seek a delay to Brexit.

To add future uncertainty, we have also seen this afternoon John Bercow stand down as commons speaker at the next election or on the 31st October, whichever comes first.

Speaking in Parliament, Mr Bercow said his tenure was nearing its end and it had been the “greatest honour and privilege” to serve.

If there was no early election, he said leaving on 31 October would be the “least disruptive and most democratic” time to go.

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