The pound falls for the possibility that Johnson prevents extending the transition period
The pound falls for the possibility that Johnson prevents extending the transition period
The pound is falling 1.55% against the dollar on Tuesday after different media have published that Boris Johnson will block any possible extension on the deadline of the transition period.
According to reports, the prime minister will change the law to ensure that the transition phase does not extend beyond the end of next year, rekindling the threat that the country can leave the European Union (EU) without an agreement.
The transition period extends from the beginning of next year to the end. During these months, the European Union and the United Kingdom must negotiate a trade agreement.
During the transition period, EU legislation continues to apply in the United Kingdom as if it were a Member State, but the country would no longer be represented in the decision-making bodies of the block. Currently, the transition period has the option of extending up to two years if both parties agree.
The British media reports that the Johnson Government will attempt to outlaw the extension of the transition period in order to accelerate a trade agreement with the EU before the end of 2020.
However, there is skepticism that a trade agreement between the EU and the United Kingdom can be reached in that short period of time, and the drop in the pound is due to the concern that the chances of the UK leaving the EU without A trade agreement has increased.
The Conservative Party of Boris Johnson won a resounding victory in the general elections last week and won a majority of 80 seats in Parliament, a victory that will allow him to follow his Brexit agenda more easily.
