Shares and sterling rally as Brexit deal announced
Prime Minister Boris Johnson has announced the UK has negotiated a deal with which to leave the European Union.
Johnson tweeted: “We’ve got a great new deal that takes back control.”
The fine details of the deal have still to be thrashed out and it will still need the approval of both the UK and European parliaments.
However, the Democratic Unionist Party said it cannot support plans “as things stand”. Johnson will need the support of the Northern Irish party to win Parliament’s approval for the deal in time for the 31 October deadline.
We’ve taken a look at what the deal means for your personal finances.
Richard Hunter, head of markets at Interactive Investor, pointed out that the deal still needs to get through European and UK Parliaments and the DUP position remains unclear – but conceded it “represents progress”.
“Sterling has unsurprisingly strengthened since the announcement, and the domestically-focussed UK stocks which are in the Brexit firing line are also motoring ahead. These are mostly typified by the property/housebuilding and banking sectors, where for example Persimmon shares are ahead by nearly 5 per cent, British Land over 4 per cent, RBS 3.5 per cent and Lloyds Banking 3 per cent,” he said, “It remains to be seen whether the reaction is short-lived as the politicians go toe-to-toe again at the weekend, but in the meantime the very possibility of an agreed outcome to the painful Brexit saga has resulted in a relief rally, both financial and psychological.”
A no-deal Brexit was widely predicted to be bad news for the property market, following months of a sluggish market with buyers and sellers playing a waiting game. So the fact a deal has been negotiated, if not yet approved, is good news.
Shepherd Ncube, founder and CEO of Springbok Properties, said: “Hallelujah. Against the odds and in the face of doubters, a Brexit deal has now been done and the UK property market can emerge from its dormant state brought about by months of political uncertainty.
“We don’t yet know the detail, of course, however regardless, the property sector will surely begin to breathe again on the basis of some level certainty being restored and this uplift in market activity should see the cogs of positive price growth and transactions start to climb once again.”
The pound rallied against the dollar, Euro and other major currencies when it was announced a deal had been reached.
The pound hit a five-month high against the dollar of $1.297 by 10.40am, but fell back slightly after the DUP’s position on Johnson’s deal was made known.
At the time of writing Pound Sterling Live was quoting the pound-to-euro exchange rate at 1.1626, and the pound-to-dollar exchange rate at 1.2928. However, analysts predict an immediate dip if the deal includes an extension to the Brexit deadline.