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'Hard' Brexit fears continue to dog markets

Thursday, September 29, 2016 - 02:00

As worries over a so-called 'hard' Brexit continue to unnverve currency markets, UK trade minister Liam Fox calls for bespoke multilateral and bilateral trade arrangements after Britain exits the European Union. David Pollard reports.

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He's the trade minister who called British business lazy and fat. That was three weeks ago. His latest speech a vision of a more energetic Britain. (SOUNDBITE) (English) INTERNATIONAL TRADE SECRETARY LIAM FOX, SAYING: "My message today is a simple one: free trade has and will continue to transform the world for the better. The UK has a golden opportunity to forge a new role for ourselves in the world, one which puts the British people first." Fox and the government's other chief Brexiteers could be winning the argument in favour of a so-called 'hard' Brexit. At least - that is the fear stalking currency traders this week. Sterling dropping to levels seen after June's referendum - on worries the UK - and traders themselves - could lose out. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "Preferential access to the single market, is going to be on less favourable terms than it is at the moment, and that is most likely to hit the most open sectors, the most tradeable sectors, and financial services is front and centre of that." For others - not knowing is worse. UK prime minister Theresa May says negotiations with the EU will start next year. But with few clues yet as to what shape a deal could take. SOUNDBITE (English) CARLOS GHOSN, CEO, RENAULT-NISSAN, SAYING: "So it's very difficult to make decisions in terms of investment. Or envision the future if you don't know how the relationship is going to be between the UK, and the main trade partner of the UK which is the rest of Europe. In our case, Sunderland, 80 percent of the cars produced in Sunderland are exported to Europe. So it's a very important decision for us." In the interim, recent surveys are gloomy. M&A activity down, investment intentions down - mortgage applications, says the Bank of England, are sliding. Optimists see a rosy future for Brexit Britain in 20 years' time. The next 20 months could be the challenge.