Pound live: Sterling set to fall further as Boris Johnson takes UK to brink of no-deal Brexit
Follow the latest business updates
Sign up to our free Brexit and beyond email for the latest headlines on what Brexit is meaning for the UK
Sign up to our Brexit email for the latest insight
The pound is set to fall even further as the likelihood increases of a no-deal Brexit that will be disastrous for the UK economy, according to a poll.
Sterling has already suffered a rout since Boris Johnson became prime minister on 24 July, falling to a two-and-a-half year low against the dollar of $1.2080 last week.
Analysts polled by Reuters predicted further declines to between $1.17 and $1.20 as the 31 October deadline day approaches.
Please allow a moment for the live blog to load
Good morning and welcome to The Independent's live coverage of business and economics events around the world.
Analysts are predicting that the pound, already battered by Boris Johnson's premiership, is set to fall further in the coming weeks.
House prices are also suffering in the Brexit gloom, according to a poll of surveyors.
Looking beyond pound v dollar, things are even worse for the pound.
Against a trade-weighted basket of major currencies, sterling hit a 33-month low on 30 July
"Sterling’s recent tumble suggests that a no-deal Brexit could take the pound into uncharted territory," says Silvia Dall’Angelo, Senior Economist at Hermes Investment Management.
Against the dollar, that could mean $1.05 to $1.10 but, "Given the tendency for financial markets to overshoot, no-deal Brexit could easily push the pound to parity with the dollar which has never happened before."
She adds:
"Going forward, there is scope for wider ranges of value for the pound, including the possibility of an increase if MPs are able to successfully block a no-deal Brexit in Parliament, but realistically, the next few months don’t hold much promise for the currency.
"September and October could be wildly volatile months for sterling."
What would the economy look like after a no-deal Brexit with one pound worth less than one dollar?
Pretty dreadul, according to Silvia Dall’Angelo, Senior Economist at Hermes Investment Management:
"A sharp currency depreciation would act as a supply-side shock, driving a spike in inflation, a squeeze on income and a drag on consumption. Savings would fail to provide an ample buffer as consumers have already dissaved significantly since the EU referendum. In fact, the saving rate is running close to its record low levels. "Business investment may also slow further as a falling pound with potential for further depreciation could spook investors. Furthermore, the benefit of rising exports usually associated with a weaker currency has not yet been felt by UK businesses, which suggests we may see little boost to exports from a weak pound."
So far today, sterling is up slightly against the dollar and flat against the euro at $1.2167 and €1.0838.
Some better news today in stock markets that have suffered recently from fears surrounding an escalating trade war between the US and China.
The major indices edged up on the back of surprise news that Chinese exports rose 3.3 per cent in July, despite rising tariffs imposed by Donald Trump's administration.
Imports were also up suggesting China is showing signs of resilience.
- Japan's Nikkei 225 up 0.37 per cent to 20,593.35.
- Hong Kong's Hang Seng up 0.5 per cent to 26,120.77
- Germany's Dax up 0.5 per cent to 11,712.12
- France's CAC 40 up 1 per cent to 5,317.74
- FTSE 100 up 0.14 per cent to 7,208.62
While interest rates and economic data would normally drive the value of the pound, right now the primary factor by a long distance is the perceived probability that the UK will leave the EU with no deal on 31 October.
The more likely it appears to be, the lower the pound goes.
This morning brings news of another plan MPs have hatched to prevent that outcome, which a majority of them - and the public - want to avoid.
MPs are considering a bid to cancel the annual autumn recess set aside for party conferences in a fresh attempt to prevent Boris Johnson ploughing ahead with a no-deal Brexit, our political correspondent Ashley Cowburn reports.
This graphic from Reuters shows just how far the pound has fallen so far since voting to leave the EU on 23 June.
Significant falls against the dollar, euro and a basket of major currencies
Brexit has put some people off buying or selling a home, says upmarket estate agent Savills, which reported results today.
Sales of UK property are at the lowest level since the financial crisis while protests in Hong Kong also dented the market there, Savills says.
Chief executive Mark Ridley: “In many markets, particularly the UK and Hong Kong, political and economic uncertainty has considerably reduced the volume of real estate trading activity in recent months, although occupier demand remains robust."
Half-year pre-tax profits fell 12 per cent to £38.4m in the six months to 30 June.
A plummeting pound of course means reduced spending power for British holidaymakers heading away this month.
As always, even the best rates for consumers are some way below the market rate.
At the best of the large foreign exchange providers, £750 will now buy you:
euros:
Debenhams - €801.75
M&S Bank - €801
Post Office - €800.25
or, for dollars:
Debenhams - $898.50
Post Office - $897
Sainsbury’s Bank - $897
Figures courtesy of Money.com
Hargreaves Lansdown doesn't seem to have been hurt too badly by its involvement in the Neil Woodford fund scandal that has seen hundreds of thousands of customers unable to access their money.
The fund supermarket recommended Woodford's now-suspended fund through its best buy lists.
It says today that inflows of client funds have "held up well" since Woodford froze clients' cash in early June.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies