Hammond sees growing consensus for transition period after Brexit
The Chancellor told the Treasury Select Committee that a transition period following Brexit would be in the interest of both the UK and the European Union.
Philip Hammond said that businesses, regulators and thoughtful politicians were increasingly in favour of a transition period.
“There is, I think, an emerging view among businesses, among regulators and among thoughtful politicians, as well as quite a universal view among civil servants on both sides of the English Channel, that having a longer period to manage the adjustment between where we are now as full members of the European Union and where we get to in the future as a result of the negotiations that we will be conducting would be generally helpful,” Hammond said.
“The further we go into this discussion, the more likely it is that we will mutually conclude that we need a longer period to deliver.”
Hammond´s remarks saw the pound finish the day at 1.2701, up from 1.2567 in the previous session.
Jane Foley, senior FX strategist at Rabobank explained to clients that "GBP has adopted a fairly binary set of reactions to UK political news dependent on whether it is deemed to support a ‘hard’ or ‘soft’ Brexit. The market appears to be evaluating the risk of a hard Brexit as noticeably lower than in October."
In parallel, citing a draft of a statement from the European Union Bloomberg reported that EU governments would be asked to “proceed swiftly” in starting negotiations with the UK once the Prime Minister trigerred Article 50 of the Lisbon Treaty.
EU leaders were expected to debate their Brexit strategy at a dinner in Brussels on 16 December following their summit earlier that same day.