Sterling fell to 1.2348 against the dollar on Thursday morning. Reuters
Sterling fell to 1.2348 against the dollar on Thursday morning. Reuters
Sterling fell to 1.2348 against the dollar on Thursday morning. Reuters
Sterling fell to 1.2348 against the dollar on Thursday morning. Reuters

Pound continues to fall as Brexit debacle deepens


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The pound fell against the dollar and euro early on Thursday, after British Prime Minister Boris Johnson dared Parliament to call for a no-confidence vote in him and again dismissed the Supreme Court’s ruling that his decision to suspend parliament was unlawful.

Sterling fell to 1.2348 against the dollar while it also fell to 1.12723 against the euro.

Broker London Capital Group said in a note on Thursday that while investors expect nothing to change from the previous weeks in the UK’s political debacle regardless of a suspended or unsuspended Parliament, the opposite will happen.

"The pound will likely start feeling the pinch of snap election talks that could bring more uncertainty to the mix, though the Labour Party will likely reject an early vote before the October 31st deadline is off the table," Ipek Ozkardeskaya, a senior market analyst, wrote.

On Wednesday, Parliament rejected Mr Johnson’s offer to hold a no-confidence vote in him, as MPs first wanted assurance the Brexit deadline would be extended.

Although the British leader continued to stand by his bid to leave the EU by the October 31 deadline, many MPs accused him of being deceptive in heated exchanges in the House of Commons. Mr Johnson said he would not ask for a Brexit extension if no deal is agreed during the EU council meeting on October 17 and 18.

“From a technical standpoint, a move below the 1.2348-support should send the pound to the bearish consolidation zone and encourage a further decline to 1.2273 ... and 1.2198,” Ms Ozkardeskaya added.

However, Ms Ozkardeshakya said a cheaper pound is expected to whet foreign investors’ appetite in British blue chips.

The FTSE 100 remained relatively resilient on Thursday morning, despite a sell-off that hit other European indices on Wednesday, advancing after four straight sessions in the red. A conciliatory statement from China did enough to counteract a trio of profit warnings from blue-chip components including  International Airlines Group, publishing and education company Pearson.

Sentiment was also supported after US President Donald Trump said overnight a trade deal with China could be struck soon.

“Following yesterday’s positive session in the US, there seems to be a bit more optimism, but it’s pretty fragile,” Markets.com analyst Neil Wilson said. Spreadex analyst Connor Campbell said Trump’s trade remarks were outweighing any other “destabilising factors” surrounding his presidency.

Conflict, drought, famine

Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.

Band Aid

Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.

Persuasion
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