The pound gained ground and UK stocks rose on news of a fresh Brexit breakthrough yesterday with the FTSE 100 and FTSE 250 rising by just under one per cent as a fresh wave of optimism rippled through the market.
Sterling was in the green, rising 0.8 per cent on the dollar to $1.2039, and strengthening 0.3 per cent against the euro to change hands at €1.1362.
It rose after the close, as prime minister Rishi Sunak announced a new Brexit deal for Northern Ireland with European Commission president Ursula von der Leyen. He said the so-called ‘Windsor Framework’, was a “historic and decisive breakthrough”, delivering “smooth-flowing trade within the whole of the United Kingdom”.
Susannah Streeter, head of money and markets, Hargreaves Lansdown said there “an extra jaunt to the upbeat mood on the markets now that a deal to break the trade impasse has finally been struck”.
But she added: “There is still a long way to go before these better relations will herald a significant recovery in cross border trade. Brexit has cast such a long shadow over the UK economy, that the lights of opportunity will need to shine more brightly before the pound undergoes a big further rebound. It’s still down some 14 per cent on its pre-pandemic level as the strength of the dollar continues to limit gains, given interest rates expectations in the US.
Alistair Baxter, Head of Receivables Finance at Taulia, said: “Markets have taken a positive outlook on the increased ease of cross border trade in the region this new agreement brings. After a challenging few years, this is welcome news for businesses locally, helping them to dismantle the barriers to near shore trade and benefit from a more seamless transfer of goods.”
Khalid Talukder, co-founder, London fintech firm DKK Partners said: “This new agreement is a decisive breakthrough, bringing to an end a period of confusion and concern for post-Brexit trading arrangements in Northern Ireland. At a time of economic uncertainty and war in Ukraine, it’s encouraging that the President of the EU and British Prime Minister can work together to deliver of frictionless international trade.
“The new framework offers an innovative solution using red and green lane systems and data analytics to improve customs checks. This new approach unlocks international trade and avoids a hard border which would have had catastrophic consequences for the Good Friday Agreement.”
Angela McGowan, the CBI’s Northern Ireland director, said: “Congratulations to the UK Government and European Union for resolving the deadlock over the Northern Ireland Protocol and delivering an historic deal.
“With social, political and economic life in Northern Ireland feeling like it has been on hold for the past couple of years, this breakthrough will allow businesses and politicians to turn their attention to economic growth and delivering greater prosperity for everyone across Northern Ireland.”
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