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The UK’s Sunday Times newspaper has reported on government plans for a no-deal Brexit.

“Senior government figures said the UK was preparing to “walk away” from trade talks with Brussels in the next month unless the EU gives ground,” The Times reports. 

The government’s XO (exit operations) no-deal planning committee, chaired by Michael Gove, met twice in one week at the start of May and senior officials say it will now sit regularly to prepare for the prospect that no trade deal is struck.

In a clear signal of intent, civil servants who had been moved to deal with the coronavirus crisis have been sent back to work full-time on no-deal preparations.

“XO is moving to a more regular rhythm over the next week or so,” a source said.

Market implications

The pound is already under immense pressure. 

“The pound was the worst performer, undermined by Brexit woes. The UK and the EU, both reported a deadlock in talks,  amid disagreement on the EU’s demand for a level playing field.

Andrew Haldane, Bank of England’s Governor, said that “there are other options beyond that, or alongside that, that we’re looking at as well,” when referring to negative interest rates. He also discussed the use of QE, although he later clarified that he was not implied policymakers are poised on any of those options,” – Forex Today: King Dollar keeps leading

  • EUR/GBP Price Analysis: Bullish to 0.9060, although pullback to support first?