This archive report was first published on 28 August 2019.
On August 28, 2019, the pound plummeted to a six-day low as concerns grew that the United Kingdom might leave the European Union without a deal in place. This came after Prime Minister Boris Johnson announced plans to restrict parliamentary time before the October 31 deadline.
Johnson's move, which includes scheduling a Queen's Speech for October 14 to launch new legislation, has been met with criticism from Commons Speaker John Bercow. Bercow described the move as a 'constitutional outrage' and stated that it was 'blindingly obvious' that the purpose of prorogation was to stop Parliament debating Brexit.
The pound's reaction to the news was severe, with the currency extending its fall to hit $1.2156, a six-day low, down 0.7 per cent on the day. Against the euro, sterling also weakened to 91.265 pence, its lowest in rate in almost a week, trading down by 0.7 per cent at 90.89 pence.
Andy Scott, associate director at independent financial risk advisor JCRA, attributed the pound's sell-off to the perception that Boris Johnson would not let Parliament get in the way of a no-deal Brexit. Scott stated, 'Sterling suffered a large sell-off this morning as traders suddenly got notice that Boris Johnson will not let Parliament get in the way of a no-deal Brexit.'
Jordan Rochester, a strategist at Nomura, added that for the pound to recover, anti-no deal MPs would have to get their acts together in the first weeks of September.
