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In a Reuters poll, it has stated that the chances of disorderly UK exit from European Union at 25% (20% in Jan poll).

Key results

  • Brexit transition period will not be extended beyond Dec 2020 -24 of 34 economists.
  • Eexpected EU/UK trade deal will only cover goods, not services -21 of 34 economists.
  • Bank of England to leave bank rate at 0.75% until 2022 at least.
  • UK economy to expand 1.0% in 2020; 1.4% in 2021 (1.1%; 1.5% in Jan poll).

FX implications

  • EUR/GBP pressured, giving back a 61.8% retracement of the eurozone data bid: As explained in the article, “As for the play-off between the Bank of England and fiscal stimulus, which the pound got a boost from earlier this month following a surprise resignation from the Chancellor, Sajid Javid, subsequently replaced by Rishi Sunak, the UK budget now confirmed to be announced on 11 March.”

 

 

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