Theresa May to announce Hard Brexit on Tuesday

7 years ago - Published in Finance, Forex

British Prime Minister Theresa May is expected to say on Tuesday that she favours a clean break from the European Union, dismissing a "half-in, half-out" Brexit deal with Brussels.

In a highly anticipated speech, May is likely to give further signals that Britain is heading to what analysts call a "hard" Brexit.
It is thought the Prime Minister is ready to take Britain out of the European single market and customs union, though it remained unclear whether she will give a definitive answer on the question.

Sterling, which has traded at the lowest levels against the U.S. dollar for more than three decades, fell to near three-month lows and stocks were mostly weaker as investors feared May would spell out plans for a "hard Brexit". Fears among currency traders and investors that the UK is heading for a hard Brexit – in which access to the EU’s single market would be sacrificed in favour of tighter control over immigration – have tended to weaken the pound, while suggestions that the UK could retain access to the EU single market have helped it recover.

"We seek a new and equal partnership, between an independent, self-governing, global Britain and our friends and allies in the EU," May will say, according to advance extracts released by her office.

In recent weeks, May raised the possibility of a transitional deal with Brussels to ease Britain's departure from the bloc, a position supported by Bank of England governor Mark Carney.

The PM’s crucial speech, which comes with less than 11 weeks to go before her end-of-March deadline for triggering withdrawal talks under Article 50 of the EU treaties, will be made to an audience including diplomats from EU states at Lancaster House.

The Labour frontbencher told BBC Newsnight that staying in the EU customs union would be the best way to preserve British businesses' ability to trade with the bloc.

But former cabinet minister and leading Brexit campaigner Michael Gove told the programme that the UK should leave the customs union.