Sterling up about 0.4% following news that UK and EU have reached agreement on the broad terms and conditions of a transitional agreement which will extend to 31 December 2020. But hurdles remain, including Irish border question, and UK and European Parliaments will have to approve the deal later this year.
Moreover, UK will have its hands partly tied during this transitional period and the real challenge will start next year when UK starts (re) negotiating hundreds of international trade deals. As the past week has shown, the big players (US, China, Russia etc…) are not in a mood for bending over, with President Trump pursuing clearly protectionist trade policies.
UK will not be a priority for the world’s largest trading nations and the risk is that UK economic growth continues to languish at the bottom of the G7 league table.
