The British pound started weakening sharply today, with the market awaking to the reality of a new UK government, its rather combative stance on the current EU-UK Brexit deal and its open remarks on the rising probability of a no deal Brexit (Michael Gove’s comments that “no deal is now a very real prospect” over the weekend). Politics should remain the key negative for sterling in the months to come. There is more scope for risk premia to be built into the pound while the Bank of England is unlikely to offer much help to the battered currency. Politics: It will get worse While the new UK government’s rhetoric on a ... (full story)