The pound jumped to a fresh 10-month high on Wednesday after it became obvious that Britain will avoid crashing out of the EU without a deal. Obvious, that is, to City traders, who have always bet that a deal is the most likely outcome of the Brexit talks and now believe it to be a racing certainty.
GBPUSD burst through $1.33 against the dollar for the first time since last July, a date seared on the memories of those obsessed with Brexit as the month when Theresa May outlined her Chequers plan, prompting Brexit secretary David Davis and foreign secretary Boris Johnson to resign.
The City is less sure about the potential for May’s plan to succeed, which is why there are good odds in bank dealing rooms for a delay leading to a better deal or second referendum. Not that a softer Brexit or no Brexit at all is necessary to cheer the City. Bankers, like most large businesses, would reluctantly support Theresa May’s deal.
The City was one of the “critical concerns” that regulators and politicians put at the front of the queue. Let’s hope it means banks won’t be too shocked should a deal prove elusive and most businesses are forced to jump out of the EU plane without a parachute.
Guardian news contributed to this article