Pound shifts higher as second referendum hopes gain traction
Pound shifts higher as markets factor in potential second referendum, while Brexit woes over UK motorists begin
Prime minister Theresa May’s no-confidence vote has impacted the markets, but the impact has only been contained to the UK and European markets, and mostly in currencies and bonds, according to IG market analyst, Kyle Rodda.
‘Interestingly enough, Labour's failed no-confidence motion has markets betting that a second referendum could be on the cards. The Pound has shifted higher after the initial vote on the basis of that.’ Mr Rodda said.
Sterling rose 0.05% against the dollar to $1.287 on Wednesday after May’s Brexit deal was defeated, but steadied after May's government won the no-confidence vote overnight.
May's Plan 'B' due by Monday has the market reacting with the assumption that there could be an extension of the Article 50 exit date past March 29.
No Brexit deal troublesome for UK motorists
Meanwhile, a UK insurance trade body has warned UK drivers that if politicians fail to strike a Brexit withdrawal deal, driving in the EU could become illegal without insurance.
The Association of British Insurers (ABI) warns consumers and companies who plan to travel by road In the EU after Brexit day, may need to provide a ‘green card’ from their insurer one month in advance.
The advice came just one day after prime minister Theresa May’s proposed Brexit deal was ousted by MPs.
The ABI said the European Commission has failed to confirm a waiver of the green card scheme that was agreed by insurance authorities in May, with the same requirements applying to EU motorists travelling to the UK after Brexit.
According to the ABI in 2017, 2.4 million heavy good vehicles travelled from the UK to the continent, while a further 370,000 travelled to Northern Ireland, according to official statistics.
‘It remains the case that insurers do not want a 'no deal' Brexit; it would be bad for the economy and bad for our customers. We continue to hope these arrangements are never needed and urge the Government, UK Parliament and EU27 to agree an orderly way forward,’ said ABI Director General Huw Evans.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Live prices on most popular markets
- Forex
- Shares
- Indices
