Pound headed to Brexit lows as UK at crisis point

Bloomberg

The UK has reached a crisis point and the pound is heading back towards its lowest levels since the Brexit vote, according to BlueBay Asset Management.
A second Brexit referendum now seems the most likely outcome after Prime Minister Theresa May delayed Parliament’s vote on her divorce deal, according to the asset manager. The EU is unlikely to offer the UK any more concessions and may start no-deal preparations at a summit on Thursday, said portfolio manager Mark Bathgate, who is shorting both the pound and gilts.
“We are now at a crisis point — the UK is now in a very difficult situation where it’s legislated a hard Brexit and can’t get the deal with the EU approved,” Bathgate said. “The pound is headed back to late 2016 lows.”
The pound fell as low as $1.1841 in October 2016, the weakest since 1985. That “flash crash” move came amid thin liquidity in Asian trading. Sterling slid towards $1.25, the lowest since April 2017, while 30-year gilts led debt gains as investors sought the safety of longer-dated bonds.