The Pound registered its largest one-day loss in over a year on Friday following a breakdown in Brexit talks on Thursday night in Salzburg. Prime Minister Theresa May met with fellow EU leaders in Austria to discuss the Irish border dilemma but her ‘Chequers Proposal’ was rejected, with supporting MPs and aides describing it as an “ambush”.
Speaking to reporters inside Downing Street the next day, the Prime Minister accused the EU of not respecting the UK, stating that the EU’s suggestions would "make a mockery of the referendum we had two years ago." May further argued that while the UK’s proposals were rejected on the basis that they “would undermine the single market”, the European Union offered no counter-proposal to the UK’s plans.
Pound down nearly two cents against the dollar after that Theresa May speech. Markets suddenly v nervous about a hard Brexit pic.twitter.com/urgh5Jy175
— Ed Conway (@EdConwaySky) September 21, 2018
Sky News (above) and Bloomberg Markets (LINK) both reported the immediate Pound Sterling price drop in the aftermath of the PM's speech. Sterling’s losses were approaching 1% ahead of the PM’s speech on Friday but fell even further afterwards reaching a 1.5% loss - the biggest daily loss since June 2017. The Pound’s drop soured what was a good week for the UK currency, having earlier hit a two-month high of $1.3297 after a surprise UK inflation rise and strong retail sales data for August.
The gold price climbed steadily on Friday, losing value briefly while investors listened to Theresa May’s statement before resuming interest in the yellow metal and driving prices up to £916 per ounce. Prices pushed fractionally higher to £917 over the weekend as the weak Pound aided gold, but gold per ounce has since slipped back to £914 as the new week begins.
Criticism of the Prime Minister has come from all sides, with this scathing tweet from Kevin Maguire, the Associate Editor of the Daily Mirror:
And after a weird seven minutes a deranged Theresa May is finished. That was a desperate PM at the end of her tether
— Kevin Maguire (@Kevin_Maguire) September 21, 2018
Elsewhere, Shehab Khan, a journalist for The Independent, quoted senior staffers in the City of London who said they “have lost all faith in Theresa May” and the Conservative Party as the party of business, while journalist and columnist Julia Hartley-Brewer – a strong advocate of the Leave campaign – had this to say:
Once again, Theresa May comes out fighting, talking tough and steely eyed. But at some point we need to see strong actions that back up those strong words. Time to walk away & prepare for a No Deal Brexit.
— Julia Hartley-Brewer (@JuliaHB1) September 21, 2018
The criticism didn’t stop there. French President Emmanuel Macron went on the offensive against Brexiteers, telling reporters: “Those who said they could do easily without Europe, that everything is going to be alright, are liars.” Mark Rutte, Prime Minister of the Netherlands, was more optimistic of a Brexit deal being reached by the end of October but stressed that EU nations “have made more preparations for a no deal”.
Perhaps the truest sign that Theresa May had suffered a resounding defeat was this bit of satirical mockery, from TV presenter and comic Richard Osman:
Theresa May getting tough reminds me so much of Kevin Keegan getting tough.
— Richard Osman (@richardosman) September 21, 2018
The official leave date for the UK from the European Union is March 29, 2019, with a deadline of the end of 2020 (an additional 21 months after that) granted to fully withdraw from the Eurozone.