Pound rises on May Brexit speech but city workers dismayed by single market withdrawal

Record ID: 164616

  • Title: Pound rises on May Brexit speech but city workers dismayed by single market withdrawal
  • Date: 17th January 2017
  • Summary: LONDON, ENGLAND, UNITED KINGDOM (FILE) (REUTERS) VARIOUS OF CITY OF LONDON SKYSCRAPERS
  • Embargoed: 31st January 2017 14:33
  • Keywords: Theresa May Brexit London markets EU single market European Union
  • Location: LONDON, ENGLAND, UK
  • City: LONDON, ENGLAND, UK
  • Country: United Kingdom
  • Topics: European Union,Government/Politics
  • Reuters ID: LVA0025ZGZ3GN
  • Aspect Ratio: 16:9
  • Story Text:Sterling saw its biggest gains since the 2008 financial crisis on Tuesday (January 17) as Prime Minister Theresa May promised a parliamentary vote on Britain's deal to leave the EU and said it would seek to stay a key European partner.
    The pound, already up more than 1 percent as May began a keenly-awaited speech that had been extensively leaked to media, surged 2.5 percent on the day to a 10-day high of $1.2343 in the minutes that followed.
    It gained more than 1.5 percent to 86.69 pence per euro, with dealers reporting a widespread squeeze on short positions - or bets against sterling - taken in derivatives markets in the past few days.
    "We saw a strengthening in the pound against both the dollar and the euro and I think that's mainly because the speech was heavily trailed as a very hard Brexit, expectations of a clean break and the slightly softened tone we had from the prime minister, the idea that we are looking to make a deal, we're fairly flexible on the conditions, really sort of assuaged market concerns," said Chris Beauchamp, market analyst at IG markets.
    During the speech in central London, May confirmed that Britain will leave the EU's single market when it exits the European Union, putting an end to speculation that London might try to seek a "soft Brexit".
    Her statement that Britain would leave the single market was by far the clearest indication she has ever given of her plans for the future, after months of criticism that she was not being sufficiently transparent.
    But on Bishopsgate in the shadow of the skyscrapers of London's financial hub, people were unimpressed by the Prime Minister's pledge to negotiate a new trade deal with the EU outside of the single market.
    "The idea that we can get as good a free trade deal with the rest of the world and with Europe, as we currently have with Europe, is complete nonsense," Gary Hutchings told Reuters.
    Heather Hovey worked in the City of London for 25 years, she said May's announcement couldn't be good news for the city and that London's financial centre was used to the single market.
    "I just think it's part of the financial structure of the way people do business and have done business. I think when people voted to leave, they didn't appreciate that would be the outcome."
    City worker Samuel Addison who voted to leave in the referendum said May's decision was a disaster.
    "I think I did the wrong thing. Entirely the wrong thing. If I had the chance again I would have voted to stay in the EU. I voted on immigration. I wasn't thinking long term but I'm looking at the market now, it is affecting my job. I think it's awful," he said.
    May has said that she plans to launch the two-year negotiation process to finalise Britain's exit by the end of March.
    The Brexit talks, expected to be one of the most complicated negotiations in post-World War Two European history, could decide the fate of her premiership, the United Kingdom and the future shape of the European Union that Britain leaves behind.
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