The British Prime Minister Boris Johnson is becoming even more radical in his statements as his political support at the Parliament wanes. He's convinced the UK will leave the European Union by the end of October.
What seems to be the most probable scenario now is no Brexit or the UK leaves in the hardest no-deal way possible.
The latter assumes a chaotic break up with harsh rating downgrades from the biggest financial institutions. In this case, the pound could plunge, the government would increase spending and debt, as the Bank of England struggles to pay external credit and investors sell British bonds.
some money managers are starting to worry about the U.K.’s heavy reliance on foreign investment to finance its large current-account deficit -- or in Bank of England Governor Mark Carney’s words the “kindness of strangers.”
If we have a no-deal Brexit then these strangers are going to get worried. In that environment are gilts going to be a safe haven? Absolutely not -- they are going to be the opposite of safe havens.
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