What does British pound wait for with a new prime minister

The British pound showed short attempts at growth after Boris Johnson winning the race for the British Prime Minister post. The reason for this was the stabilization of political tension in the British Parliament. But anti-European positions also increased along with the new prime minister and the cabinet ministers in parliament.

Boris Johnson and his entourage is one of the most ardent supporters of Brexit. He does not exclude the possibility of a British exit from the EU without a deal. He stated repeatedly this during the race for the British Prime Minister post. Johnson’s main goal remains the exit of the UK from the EU until October 31 with or without a deal.

The main problem of the new British government is the Brexit deal and getting enough votes in parliament to implement Brexit.

Brexit current deal issues

The existing Brexit deal between the UK and the EU, adopted under Prime Minister T. May, is a significant stumbling block. The current government is not satisfied with this deal. This forces B. Johnson to make statements that the UK will come out without a deal, rather than with one.

The EU’s position on the Brexit deal remains unchanged. With that, a number of senior officials in the eurozone commented that they are not going to revise the terms of the Brexit agreement.

Lack of consensus on Brexit

Despite the creation of a new government in the UK, the problems of lack of consensus on Brexit persisted. So, after Johnson came, the number of supporters of withdrawal from the EU in the government increased. But even in this situation, there are many who are not satisfied with a way out without a deal.

Therefore, the likelihood of early general elections increases in direct proportion to the lack of agreements on Brexit. At the same time, early elections do not guarantee the resolution of the Brexit issue. However, they promise additional growth of political uncertainty in the UK.

As a result, the new British government may be faced with the same problem as the May government. Significant progress on Brexit can be expected after the UK and the EU return to negotiations. But this probability is extremely low at this stage.

While the British pound remains under the pressure from the risks associated with:

• the uncertainty about the adoption or revision of the Brexit deal;
• the possibility of early elections;
• and, finally, the risks of Brexit without a deal, if they fail to agree.

Anton Hanzenko