UK: Return of the politics - Rabobank

Elwin de Groot, Eurozone Senior Strategist at Rabobank, notes that it’s the return of politics (minus the geo) in UK with Scotland’s first minister Sturgeon commenting that Scotland will try to stay in the EU’s single market even if the UK decides to leave.

Key Quotes

“UK prime minister May also decided to chip in, stating that the UK aims to negotiate an exit deal within the two year timetable that has been set out while also making the case for a transitional deal. However, even temporary incompatibility with the EU’s “four freedoms” and the risk that “temporary” becomes “permanent” is likely to make this a hard sell to Britain’s EU partners.”

“Luckily we will get more details of May’s Brexit plan in the form of a speech (late Christmas present?) in early 2017. Yesterday’s comments however did not provide respite for the pound as it was bludgeoned down to 1.233 by a strong dollar (same versus the euro, although to a lesser extent).”