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Daily Brexit update: No sterling bounce yet as optimism ebbs

Daily Brexit update: No sterling bounce yet as optimism ebbs

Another fresh weekly low for sterling signals no further progress this week by Britain and the European Union in reaching an accord on how the former can exit as painlessly as possible. Downing Street, lately a source or pragmatic optimism about prospects of the latest round of talk spearheaded by UK Attorney General, has turned pessimistic. No. 10 notes that a breakthrough in the next 48 hours looks unlikely. This casts doubt on plans for next week, when Prime Minister Theresa May has promised parliament a fresh opportunity to vote on a revamped Brexit deal. If there a no fresh terms—particularly on the backstop—to vote on, the chances of MPs giving May’s deal the nod diminish.

That opens up wider uncertainty about whether Britain can achieve an agreement with enough time by its 29th March deadline. The backdrop is a European Union whose key officials are becoming sterner about the terms of any extension of the article 50 negotiating period, implying even more of a snarl up should a request be forthcoming whilst political rancour is heightened.

The pound has duly fallen half a per cent to the edge of the $1.30 handle. It has been more resilient against a weaker euro.

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