Michel Barnier, European Union chief negotiator, departs from his hotel on Dec. 5, 2020, in London, England.
Hollie Adams/Getty Images
The pound slumped on Monday to its worst levels in weeks, on worries over the possibility that talks between the U.K. and the European Union over a trade deal won’t succeed.
The pound
GBPUSD,
skidded as low as $1.3225, the lowest level since Nov. 19, from $1.3437.
Over the weekend, U.K. Prime Minister Boris Johnson held talks with European Commission President Ursula von der Leyen, as negotiators try to reach a deal on a level playing field, dispute mechanisms, and fishing. The pair will hold another call at 4 p.m. U.K. time, or 11 a.m. Eastern, according to a spokesman for von der Leyen.
Irish Foreign Minister Simon Coveney told Irish broadcaster RTE that the update on Monday from the EU’s chief negotiator, Michel Barnier, was “very downbeat.” The Sun reported a source close to Johnson saying he could opt for a no-deal exit within hours.
“It’s all about Brexit this morning, as tensions rise due to the lack of a deal, and rhetoric on blame and time running out rising quickly,” said analysts at Natwest Markets.
Most analysts still expect a trade deal, despite the late jitters.
The weakness for the pound gave a boost to the FTSE 100
UKX,
where companies that make their money outside the U.K. benefited from sterling weakness. Cigarette makers British American Tobacco
BATS,
and Imperial Brands
IMB,
both gained, as did pharmaceuticals AstraZeneca
AZN,
and GlaxoSmithKline
GSK,
AstraZeneca also was helped by a Morgan Stanley upgrade to overweight from equalweight.
U.K. home builders including Berkeley Group
BKG,
and Persimmon
PSN,
and banks including Lloyds Banking Group
LLOY,
suffered on concerns over the U.K. economy.
Countrywide
CWD,
jumped 19% to 304 pence as Connells, a real-estate agent, upped its offer for its rival by 30% to 325 pence per share. Private-equity firm Alchemy Partners has offered to inject £70 million and take controlling a stake in Countrywide.
IMImobile
IMO,
a U.K. communications software company, jumped after networking hardware company Cisco Networks
CSCO,
struck a £543 million deal to buy it at a 48% premium to Friday’s close.
