The value of the pound surged today after news that the Government may pay for access to the single market post-Brexit.
With sterling up 1per cent against the dollar – its highest level in three weeks – it seems things might be looking fractionally better for the UK.
Against the Euro, the pound was up 0.63 per cent thanks to the currency’s struggles in the face of the Italian referendum on Sunday.
The strengthening pound comes off the back of comments by Brexit Secretary David Davis, who told MPs that ministers are aiming to ‘get the best possible access for good and services to the European market’ after the UK takes its leave from the European Union.
He went on the suggest the Government would be open to the possibility of paying the EU to secure this access.
Neil Wilson, senior market analyst at ETX Capital, said: ‘Sterling is on the tear this morning on hopes for a soft Brexit.
‘David Davis said the UK could contribute to the EU budget in return for access to markets and that has fuelled a rally for the pound.
‘Meanwhile the pound has reached its best level against the euro since September as the clouds of uncertainty over Italy’s referendum weighs on the single currency. We could get a further fall in the euro if Italy votes No on Sunday.’
Chancellor Philip Hammond said the comments made by David Davis show the need to go into negotiations with ‘as flexible an approach as we can’ to get a deal that ‘maximises’ access.
He did, however, stress that any Brexit deal would need to be looked at in the wider perspective.
‘We can’t go into any deal without concessions on either side.’