GBP recovery could be short lived, says SEB

Commenting on GBP gains ahead of the UK general election on 12 December 2019, Richard Falkenhäll, Senior FX Strategist at SEB, the leading Nordic corporate bank, says sterling’s recovery could be short-lived…

“The GBP continues to gain on the back of opinion polls showing a stable lead for the Conservative party, and markets are now probably almost fully discounting a Tory majority in UK Parliament after the general election.
“While this would create some certainty around Brexit in the short term as the UK will then leave the withdrawal period and move into the transition period in January 2020, a Conservative win will in fact increase the risk of the UK falling out of the EU without a trade deal by the end of next year (2020). It might be that the GBP recovery could turn out to be quite short-lived.”