The Strategist

Analysts: Pound Sterling will fall to 2 years low in case new PM supports hard Brexit

06/10/2019 - 12:23

British pound sterling will fall in price to a minimum of 2 years in the event that the new British Prime Minister becomes a supporter of the hard Brexit, say analysts polled by Bloomberg.

Mark Hodson Photos via flickr
Mark Hodson Photos via flickr
In May 2019, British Prime Minister Theresa May announced that she would leave the post of leader of the Conservative Party on June 7. Now the UK is getting ready to elect new Head of the Government.

If the new Head will support the option of a hard exit of the country from the EU, the pound may drop by more than 2%, to $ 1.24, according to the survey results.

Most of survey forecast that the hard Brexit supporter is the most likely scenario - the chances are 70%. Analysts expect parliamentarians to prevent Britain from leaving the EU without an agreement with Brussels to prevent a more significant weakening of the national currency.

According to media reports, Boris Johnson is the absolute leader in the fight for the post of Prime Minister of the UK. Other likely candidates are the current head of the British Foreign Office Jeremy Hunt, the former leader of the House of Commons Andrea Leadsom, and the Minister of the Environment Michael Gove.

If the government is led by supporters of a softer version of Brexit, the likelihood of which is estimated at only 30%, a pound could rise in price to $ 1.30, according to a Bloomberg survey.

The British currency has fallen by 3% over the last month and is currently trading at around $ 1.27.

It is expected that the new leader of the Conservatives will be elected in the week starting July 22, so May will remain Prime Minister for another six weeks.