Sterling has jumped higher after the UK and EU secured a new post-Brexit deal for Northern Ireland in a move set to end long-running tensions after Brexit. The pound leapt 0.7 percent higher to 1.20 US dollars and was 0.3 percent up at 1.14 euros.
It came after a Government source said Prime Minister Rishi Sunak and European Commission president Ursula von der Leyen had signed a breakthrough deal at a meeting in Windsor, Berkshire.
The FTSE 100 Index was also trading 0.6 percent or 50.7 points higher at 7929.4 in afternoon trading on Monday (February 27).
Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown, said: “Dawn may be about to break on a new era of calmer relations between the UK and the European Union, but hopes still aren’t racing away that it will herald a significant post-Brexit boost for the economy.
“This new consensual approach should help for other thorny political problems such as migration, but in itself it’s unlikely to move the dial much for a big uplift to UK trade immediately.”
But he added sterling is likely to see heightened volatility until any deal is finally given the all-clear by the DUP and Tory Eurosceptics.
He said: “Any further roadblocks in the process could prove to be quite counterproductive for the moods of investors and could lead to a pullback from current levels which have already acted as a resistance in the past.”
Earlier in the day, Tory Brexiteer Jacob Rees-Mogg warned Mr Sunak of a possible Tory revolt if the DUP does not support the deal, despite major concessions expected from the EU.
The former cabinet minister told GB News: “It will all depend on the DUP. If the DUP are against it, I think there will be quite a significant number of Conservatives who are unhappy.”
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DUP leader Sir Jeffrey Donaldson said: “We’ll take our time to consider the detail and measure a deal against our seven tests.”
Arch-Brexiteer Steve Baker, a Northern Ireland Office minister, gave Mr Sunak his support.
He told broadcasters as he left No.10: “I can only say this: that the Prime Minister is on the cusp of securing a really fantastic result for everyone involved.”
