The British currency sinks further into the abyss as the British press reveals reports claiming that Theresa May will confirm the worries over the "hard Brexit" in her tomorrow's speech.
Today, the pound tumbled below $1.20 - its lowest level in more than three months. This heavy drop comes hours before tomorrow's speech of the Prime Minister May regarding her position on the upcoming Brexit negotiations with the EU. The Sunday Times revealed a number of reports that suggested that Theresa May was about to make an announcement that would send the financial markets into turmoil yet again.
According to The Sunday Times, May will finally make it clear that the U.K. is set to stop being a member of the single European market and the Customs Union as well as end the jurisdiction ties with the European Court of Justice, as part of its main plan to take hold of the growing immigration issues. By making it clear, the sources familiar with the matter meant that the Prime Minister had "gone for the full works" and her tomorrow's announcement would trigger another decline of the pound.
“She’s gone for the full works. People will know when she said ‘Brexit means Brexit’ she really meant it,” another anonymous source told The Sunday Times.
That report was enough to drag the pound down already today, even before the official announcement. Analysts are convinced that the pound is subject to further risks in the upcoming weeks.
"If this messy Brexit episode explodes out of control this quarter, there is a possibility of the Bank of England adopting a dovish stance which may spark a divergence in monetary policy between the Fed and BoE," said an analyst Lukman Otunuga, as reported by The Telegraph.
The representatives from all 27 EU member states are invited to attend May's speech tomorrow, what only confirms that some important announcements will be made. The Sunday Times also mentioned that the Prime Minister plans to make arrangements to trigger "article 50", starting the process of Brexit, as soon as possible.
The German Chancellor Angela Merkel reminded this afternoon that there had been no change to the Brexit status so far and noted that the EU "must wait for Britain's application to leave".