Theresa May speech expectation drags down value of sterling

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Ahead of a key speech this week on Britain’s position with regards to Brexit negotiations the pound has once again dropped back against the US dollar, and is once again trading for as low as $1.20. The markets have been spooked by leaked reports that suggest Mrs May will plot the UK on a course for a “Hard Brexit”. This will entail Britain leaving the single market in which the UK operates within.

 

Downing Street has so far refused to be drawn on the contents of the speech, but they certainly have failed to deny that this is their position. The news would be a blow to the business community who had hoped that the UK would try to negotiate holding on to the valuable market access. But in recent interviews Mrs May has indicated that the UK is essentially leaving the zone and negotiating seperately. This would spell danger for many businesses that rely on their trade with EU partners to succeed.

 

Liberal Democrat leader Tim Farron had urged previously that the UK had only voted for Brexit and not the terms and had insisted that the UK should go to the polls for a second time to vote on any proposed renegotiation is put in to place and the UK leaves the union. Though these calls have largely been ignored. The question of the type of “Brexit” is a key one. There is little doubt that the UK’s access to the single market is beneficial for trade and industry, but there are many who claim that the cost of having open borders to EU citizens has been an extremely heavy price for the UK to pay for this privilege. Indeed one of those costs of open immigration from the EU is thought to have been one of the key drivers behind the vote going the way it did.

 

The leave campaign leveraged the public’s fear of immigration to devastating effect during the campaign. It was one of the key issues and they were certainly aware of that. They had been often criticised for not telling the truth on immigration matters, as honesty seemingly took a backseat throughout the campaign.

 

But now that we have a result it is the destination which needs to be the focus, Mrs May will now come under extreme scrutiny as her actions now may damage the country for many years to come. Everyone will be hoping that she gets it right, because the potential damage doesn’t bear thinking about.

About Joseph Thornton:
Joseph is a 34 year old freelance writer from London. He has a wide interest in politics and specialises in the subject. He's also a blog writer in his spare time.