The pound is set to fall even further as the likelihood increases of a no-deal Brexit that will be disastrous for the UK economy, according to a poll.
Sterling has already suffered a rout since Boris Johnson became prime minister on 24 July, falling to a two-and-a-half year low against the dollar of $1.2080 last week.
Analysts polled by Reuters predicted further declines to between $1.17 and $1.20 as the 31 October deadline day approaches.
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Analysts are predicting that the pound, already battered by Boris Johnson's premiership, is set to fall further in the coming weeks.
House prices are also suffering in the Brexit gloom, according to a poll of surveyors.
Looking beyond pound v dollar, things are even worse for the pound.
Against a trade-weighted basket of major currencies, sterling hit a 33-month low on 30 July
"Sterling’s recent tumble suggests that a no-deal Brexit could take the pound into uncharted territory," says Silvia Dall’Angelo, Senior Economist at Hermes Investment Management.
Against the dollar, that could mean $1.05 to $1.10 but, "Given the tendency for financial markets to overshoot, no-deal Brexit could easily push the pound to parity with the dollar which has never happened before."
She adds:
"Going forward, there is scope for wider ranges of value for the pound, including the possibility of an increase if MPs are able to successfully block a no-deal Brexit in Parliament, but realistically, the next few months don’t hold much promise for the currency.
"September and October could be wildly volatile months for sterling."
What would the economy look like after a no-deal Brexit with one pound worth less than one dollar?
Pretty dreadul, according to Silvia Dall’Angelo, Senior Economist at Hermes Investment Management:
"A sharp currency depreciation would act as a supply-side shock, driving a spike in inflation, a squeeze on income and a drag on consumption. Savings would fail to provide an ample buffer as consumers have already dissaved significantly since the EU referendum. In fact, the saving rate is running close to its record low levels.
"Business investment may also slow further as a falling pound with potential for further depreciation could spook investors. Furthermore, the benefit of rising exports usually associated with a weaker currency has not yet been felt by UK businesses, which suggests we may see little boost to exports from a weak pound."
"Business investment may also slow further as a falling pound with potential for further depreciation could spook investors. Furthermore, the benefit of rising exports usually associated with a weaker currency has not yet been felt by UK businesses, which suggests we may see little boost to exports from a weak pound."
So far today, sterling is up slightly against the dollar and flat against the euro at $1.2167 and €1.0838.
Some better news today in stock markets that have suffered recently from fears surrounding an escalating trade war between the US and China.
The major indices edged up on the back of surprise news that Chinese exports rose 3.3 per cent in July, despite rising tariffs imposed by Donald Trump's administration.
Imports were also up suggesting China is showing signs of resilience.
- Japan's Nikkei 225 up 0.37 per cent to 20,593.35.
- Hong Kong's Hang Seng up 0.5 per cent to 26,120.77
- Germany's Dax up 0.5 per cent to 11,712.12
- France's CAC 40 up 1 per cent to 5,317.74
- FTSE 100 up 0.14 per cent to 7,208.62
While interest rates and economic data would normally drive the value of the pound, right now the primary factor by a long distance is the perceived probability that the UK will leave the EU with no deal on 31 October.
The more likely it appears to be, the lower the pound goes.
This morning brings news of another plan MPs have hatched to prevent that outcome, which a majority of them - and the public - want to avoid.
MPs are considering a bid to cancel the annual autumn recess set aside for party conferences in a fresh attempt to prevent Boris Johnson ploughing ahead with a no-deal Brexit, our political correspondent Ashley Cowburn reports.
This graphic from Reuters shows just how far the pound has fallen so far since voting to leave the EU on 23 June.
Brexit has put some people off buying or selling a home, says upmarket estate agent Savills, which reported results today.
Sales of UK property are at the lowest level since the financial crisis while protests in Hong Kong also dented the market there, Savills says.
Chief executive Mark Ridley: “In many markets, particularly the UK and Hong Kong, political and economic uncertainty has considerably reduced the volume of real estate trading activity in recent months, although occupier demand remains robust."
Half-year pre-tax profits fell 12 per cent to £38.4m in the six months to 30 June.
A plummeting pound of course means reduced spending power for British holidaymakers heading away this month.
As always, even the best rates for consumers are some way below the market rate.
At the best of the large foreign exchange providers, £750 will now buy you:
euros:
Debenhams - €801.75
M&S Bank - €801
Post Office - €800.25
or, for dollars:
Debenhams - $898.50
Post Office - $897
Sainsbury’s Bank - $897
Figures courtesy of Money.com
Hargreaves Lansdown doesn't seem to have been hurt too badly by its involvement in the Neil Woodford fund scandal that has seen hundreds of thousands of customers unable to access their money.
The fund supermarket recommended Woodford's now-suspended fund through its best buy lists.
It says today that inflows of client funds have "held up well" since Woodford froze clients' cash in early June.
There was a 15 per cent jump in the number of homes being repossessed in the second quarter of 2019 compared to a year before.
A total of 1,270 homeowners had their property repossessed in the period, according to trade body UK Finance.
Repossessions remain below the levels reached in the aftermath of the financial crash in 2009-14.
Troubling reading in the UN's climate change report released today which says that humans need to urgently change their diets to avoid catastrophic levels of global warming.
That will mean huge changes for the agriculture and food industries.
Vicki Hird from Sustain, a British charity which advocates better food and farming, says: “The IPCC report proposes adopting farming practices that work with nature rather than forcing production with overuse of artificial fertilisers.
"A key step would be to end harmful subsidies of big single crops (such as corn, sugar cane, soy) and fossil fuels.”
Full report here from science correspondent Phoebe Weston:
Donald Trump frequently boasts about the positive effect he is having on the US economy.
But recent revisions to official data mean that the US expansion from late-2017 to mid-2018 was stronger, and that growth was subsequently a lot weaker, than previously thought, say analysts at Capital Economics.
US growth is slowing down not speeding up as had been thought:
Capital Economics forecasts that the US will be the biggest drag on the global growth during April to June this year.
That could be bad news for Trump who is pinning his hopes for a 2020 election victory on a healthy economy.
An interesting (satirical) take on the pound's fall in value over the last couple of weeks:
The FTSE-100 index is up 19.42 at 7218.12.
The pound is broadly flat so far today against both the euro and dollar.
More people still believe the UK was wrong to vote to leave the EU than think it was right to do so, according to YouGov:
Liz Truss, the UK’s international trade secretary, is speaking to the right-wing US think tank the Heritage Foundation today about a trade deal with the US.
The ultra-free-market organisation is committed to cutting environmental regulations and other protections.
Ms Truss met privately with the group last year, documents obtained by Greenpeace’s investigative unit Unearthed revealed this week.
Among the topics discussed were “what we can learn from ‘Reaganomics’ on things like regulation and red tape”.
More bad Brexit news for homeowners?
The UK housing market is stuck in a holding pattern as buyers wait for more clarity on Brexit before committing to a purchase that could prove unwise if Britain crashes out of the EU in October, reports Olesya Dmitracova.
Political and economic uncertainty has driven UK residential transactions at Savills to their lowest level since the financial crisis, the estate agency, one of the nation’s largest, said in its half-year earnings report on Thursday.
A fall in home sales was also revealed in the July survey by the Royal Institute of Chartered Surveyors, and earlier this week Halifax said sales had dropped during the early months of the summer.
Full report here:
Housing market loses momentum as UK inches closer to no-deal Brexit
The Independent's business and economics editor on Brexit and the housing market:
Nationwide is returning £6m to more than 320,000 of its customers after the Competition and Markets Authority found that the bank had failed to alert the customers before charging them for unarranged overdrafts.
The CMA introduced an order in February last year stating that bank customers with personal current accounts must receive a text alert before the charges can be levied. The order was aimed at giving customers the opportunity to avoid unexpected fees.
