Sat. Jan 23rd, 2021

Pound tumbles amid Brexit cliff-edge fears; wage growth slows – business live

Rolling coverage of the latest economic and financial news

10.53am GMT

Shares in UK-focused companies are sliding further into the red, wiping out some of the gains recorded on Friday.

Banks are in the front-line, on fears that a new cliff-edge Brexit crisis will weaken the economy in 2020. That’s driven Royal Bank of Scotland down by 4% — a blow to the government, which still owns a majority stake.

10.47am GMT

Sterling’s slump today is a timely reminder that Brexit is far from over, despite Boris Johnson’s election claims that he would get it “done” and move onto other issues.

Dean Turner, economist at UBS Wealth Management, has warned that sterling will remain highly volatile over the next few months, with a crucial deadline falling in the summer.

“The pound’s latest slide is symptomatic of the fact that Brexit is a way off being “done”, and will remain important for sterling over the coming months.

“Despite the Prime Minister’s new-found majority spurring a relief rally, gains were always likely to be capped as investors turned their attention to phase two of the talks. The deadline for extending the UK’s transition period beyond the end of next year comes on 1 July. The risk of the UK reverting to trading with the EU on WTO terms could still drive larger GBP moves, particularly given the latest noises coming out of Downing Street.

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