Kit Juckes, an economist at Societe Generale explained where we are to date with respect to the UK government in a disarray post last week’s surprise outcome from the UK elections.
“In the U.K, the fall-out of the Prime Minister’s catastrophic election campaign continues and the press consensus is that 1) she’s likely to face a challenge in the coming days and 2) Brexit negotiations will now err towards a “soft Brexit” rather that the “no deal is better than a bad deal” mantra we’ve heard too much of.
I still don’t see how a deal which fails to deliver largely unfettered access to the Single Market can be called soft, and I still struggle to see how that can be agreed without a huge capitulation on border control.
There really isn’t much wiggle room in the ‘four freedoms’. However, yet another sterling short-covering squeeze isn’t out of the question. And yes, it would be just another chance to buy EUR/GBP.”