Brexit Briefing: UK Chancellor Hammond Says Talks Must Be Accelerated

2017-10-02 14:47:00

Talking Points

- The Pound eased back Monday as UK finance minister Philip Hammond called for a time-limited Brexit interim period of around two years.

- The UK’s economic future will remain closely linked with the EU, he said.

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The slide in the British Pound against the US Dollar gathered pace Monday at the start of the annual conference of the UK’s ruling Conservative Party. GBP/USD hit its lowest level for more than two weeks, partly on Dollar strength but also because of continued concern about the progress of the Brexit talks between the UK and the EU.

Speaking at the conference, the UK Chancellor of the Exchequer Philip Hammond defended capitalism and said that “the process of negotiating our exit from the EU has created uncertainty so investment has slowed as businesses wait for clarity.” He added that: “Our economic future will remain closely linked with the EU for many good reasons,” and said “We must resolve the short term challenge of uncertainty around this process by accelerating the talks and delivering a time-limited interim period of around two years for our businesses to adjust.”

However, his words did little to reassure investors in the Pound, which continued to ease.

Chart: GBP/USD One-Hour Timeframe (September 14 – October 2, 2017)

Chart by IG

The whole concept of capitalism has come under scrutiny in the UK, with support rising for the opposition Labour Party’s more left-wing views. UK Prime Minister Theresa May is also facing opposition from within her own party, with some political commentators saying that UK Foreign Secretary Boris Johnson, a Brexit hardliner, is close to mounting a leadership challenge.

Meanwhile, Steve Baker, a Eurosceptic Member of Parliament who is a junior minister in the UK’s Brexit Department, said at the party conference that he is “very hopeful that everyone will see the mutual advantage” of moving on to a discussion of the future relationship in October.

He was referring to a meeting of the European Council on October 19-20, during which the 27 remaining EU members will review the latest developments in the Brexit negotiations. The UK is hoping that enough progress will have been made by then to move on to the subject of the future relationship between the UK and the EU.

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