MUFG Research discusses GBP outlook in light of the latest Brexit developments.
"The pound continued its grind lower from yesterday, down more than 1% since the beginning of the week. This was on the back of a renewed pickup in Brexit uncertainty following yesterday’s cross-party talks between the Tory and Labour parties, ending without conclusion. Although talks are scheduled to continue today, it is becoming increasingly apparent that these talks will likely end without the desired compromise,' MUFG notes.
"PM May conceded before the commencement of these talks yesterday that it was no longer possible to avoid the UK participating in the European elections. As a result she is now targeting the 1st of August as the new date for Brexit which could see her remain in office into September.
These latest developments have highlighted the tenuousness of her position and we are increasingly sceptical that she will remain in place as PM that long. A Tory leadership election is becoming increasingly likely," MUFG argues.