A disorderly Brexit would deliver “a significant shock” to an already weakened European economy, European Central Bank vice-president Luis de Guindos told French daily Le Monde.
“A disorderly Brexit… would represent a significant macroeconomic shock at a time when the European economy is already weakened,” de Guindos said in an interview it published on Tuesday.
Reuters News Reports..
If a ‘NO Deal Brexit’ reached the Pound could fall by as much as 8% against the Dollar over the coming months some forecasters predict with some stating Sterling is now a “do not touch” kind of currency because a no deal Brexit is a possibility playing out in parliament.
Latest forecasts for the UK and Pound Sterling come after a week that saw the government defeated in parliament once again, which has stoked scepticism over whether the EU will provide concessions in the Brexit negotiations given the low level of domestic support commanded by the Prime Minister.
Prime Minister Theresa May asked the House of Commons last week to show symbolic support for her efforts to continue negotiating with the EU by voting with a majority to approve a non-binding motion setting out the path ahead, although it failed to secure the backing of enough MPs.
Unfortunately for Sterlng, the message analysts and economists have taken from last week’s events is that the EU will now be even less likely to offer concessions over the Northern Irish backstop because it’s not certain that even those would be enough to get the Withdrawal Agreement approved by parliament.
The current legal position is that if the EU Withdrawal Agreement is not ratified by parliament before March 29, 2019 then the UK will leave the EU and default to doing business with it on World Trade Organisation (WTO) terms, which many economists say would be bad for growth.
Such an outcome could force the Pound-to-Dollar rate to decline by almost 8% to 1.19 during the coming months, which would mark its lowest since October 2016 and is a level that has rarely been seen before and until Brexit, was unheard of since the late 1980s.
Various media helped contribute to this report..