Brexit and politics are affecting the pound again. The external challenge, alongside a difficult growth path and limited fiscal flexibility, suggests that the GBP should fall from here regardless, in the view of economists at HSBC. Key quotes “The window to sign a free-trade agreement between the UK and EU is closing fast. And there is an increasingly fraught domestic political situation. The Internal Market Bill – which the government itself has admitted breaks international law (albeit in a ‘limited and specific’ way) via reneging on the previously signed Withdrawal Agreement (source: BBC, 8 September 2020) – has created headlines which have swung the GBP back and forth. However, the real question for the GBP is whether these events increase or decrease the possibility of a free-trade agreement with the EU. The mood music from the EU suggests things are getting more difficult, not less.” “Anything that makes a free-trade agreement less likely should weigh on the GBP. If it becomes evident that ‘no deal’ is the most likely outcome, the fall in GBP would not be ‘limited and specific’. We believe GBP/USD should trade materially lower in this scenario. But even if a deal can be reached, it is worth remembering that the barriers to UK-EU trade and investment will still be greater in the future than they are now.” “The external challenge, alongside the difficult growth path and limited fiscal flexibility, suggests that GBP should fall from here regardless. We expect GBP/USD to decline further this year.” FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next NEO Price Forecast: NEO gets ready for turbulence ahead of mainnet update FX Street 2 years Brexit and politics are affecting the pound again. The external challenge, alongside a difficult growth path and limited fiscal flexibility, suggests that the GBP should fall from here regardless, in the view of economists at HSBC. Key quotes “The window to sign a free-trade agreement between the UK and EU is closing fast. And there is an increasingly fraught domestic political situation. The Internal Market Bill – which the government itself has admitted breaks international law (albeit in a ‘limited and specific’ way) via reneging on the previously signed Withdrawal Agreement (source: BBC, 8 September 2020) – has created headlines… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.