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Brexit 'dinner disaster' gives sterling bad taste

Tuesday, May 02, 2017 - 01:40

Sterling rose briefly after data showed UK manufacturing growth surged to a three-year peak in April. But, as Sonia Legg reports, the pound was also under pressure from a long weekend during which the rest of the EU took a tough and united stance on Britain's exit from the bloc.

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Brussels gossip or Brexit brinkmanship? When Theresa May and Jean Claude Juncker met last week the tone was officially described as constructive. But new media reports say the EU commission chief said the meeting made him '10 times more sceptical' about a deal. And that's not all. (SOUNDBITE) (English) LIZ PIPER, REUTERS REPORTER, SAYING: "A German newspaper reported that Juncker had told Angela Merkel the German chancellor that Theresa May lived on a different galaxy that she had very little comprehension about how the EU worked and that her strategy was just not going to work at all." UK government sources reportedly say they won't enter into a briefing war with Brussels. And the saga might even go down well on British doorsteps as the British prime minister campaigns ahead of June's general election. But it's all making investors nervous. The saga briefly knocked sterling back below $1.29, before stronger-than-expected manufacturing data saved the day. (SOUNDBITE) (English) NAEEM ASLAM, SENIOR MARKETS ANALYST, THINK MARKETS, SAYING: "As long as she maintains her hard core stance to a hard Brexit I think the problem will very much be on the table because unless both parties agree to negotiate in a manner which would create less noise in the market I think we're going to see more turbulence when it comes to both the equity market and the forex market. And it doesn't appear by any means that either side is going to give away what they want." Tittle tattle or home truth - the exact details may never be known. But more rumours, reports, leaks AND spin are one of the few certainties of the upcoming Brexit talks.

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Brexit 'dinner disaster' gives sterling bad taste

Tuesday, May 02, 2017 - 01:40