About Personal Business Partnerships Contact Login Sign Up NOV 24 | 2021 Pound to Remain Under Pressure amid Brexit Concerns Dhaval The pound will remain under pressure over ongoing Brexit tensions and dour market sentiment. Despite the positive news that the UK’s private sector expanded in November, which strengthens the case for a Bank of England rate hike, the pound remained subdued. Global risk off sentiment will be the main driver as the UK economic calendar is light. On a more general note, Barclays has forecast that the pound will come under pressure against both the euro and US dollar in the coming weeks and months and will start recovering in the second half of 2022. Brexit European Commission's Brexit negotiator Maroš Šefčovič expressed his disappointment as the talks with the UK have not resulted in significant progress and they could drag into 2022. He emphasised that the two sides could still make “decisive progress this week” regarding the trade of medicines between Britain and Northern Ireland, that could “generate positive momentum” for the talks. French fishers The UK’s months-long fishing dispute with France has heated up. French media reported on Tuesday that talks between the UK, France and the European Commission over post-Brexit fishing rights reached a deadlock. Angry French fishers are expected to decide on Thursday about what action to take, as it is possible that they will block road and sea freight that is heading to the UK via Calais and other Channel ports. France says the UK has denied permits to 150 French boats, while Britain claims that has every right to check whether French vessels have a track record of operating in Britain’s coastal waters. Olivier Leprêtre, the president of the organisation that represents fishers’ interests in northern France, warned: “The poor British are already lacking some products since Brexit, and unfortunately they’re about to be lacking a few more … Britain wants access to the European market? They should give us the licences. We’ve been waiting 11 months.” Leprêtre added: French fishers “insist that the European Commission takes its responsibilities seriously and ensures the Brexit deal is respected”, and also to “warn Boris Johnson that his fishers have access to the EU market, so we should have access to British waters.” The French foreign minister, Jean-Yves Le Drian, also said on Sunday that Britain was “engaging in exaggerated and exasperating nitpicking” when it came to the issue of the permits and called the EU to take firm action to ensure that Brexit agreements were respected. UK PMI data Markit reported UK Flash Manufacturing PMI rose to 58.2 in November which has fuelled expectations of a Bank of England rate hike. Experts have speculated that the Bank of England will raise interest rates in December as rising wages and fuel, energy and materials’ prices have pushed UK companies’ costs up at the fastest rate since the beginning of the index in 1998. Around 63% of firms polled in IHS Markit’s purchasing managers survey, which is a reliable indicator of business confidence, said their costs increased this month. The rise suggests that inflation could be more deeply rooted in the wider economy than first thought, especially if firms increase their prices for consumers. Chris Williamson, chief business economist at IHS Markit, said the survey’s findings could force the Bank to raise interest rates next month. The data is supportive of the British currency, but the lower pound suggests that the UK currency is more affected by the weak investor sentiment as the current market is more focused on global issues. If you are a business transferring funds overseas, contacting a currency specialist could save you time and money. Get in touch with Universal Partners FX and their dedicated team to discuss the latest market movements ahead of your currency exchange. If you are transferring funds to pay your employees abroad, get in touch with Universal Partners FX to find out how much you can save in your international money transfers. Universal Partners FX can provide invaluable help on efficient risk management and tailored solutions to your business’ transfer needs. 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