GBP Exchange Rate Outlook Downgraded over Renewed Brexit Fears from Ryanair?s O?Leary

Modified: Thursday, 8 September 2016 09:15 BST - Written by Tim Boyer

STORY LINK GBP Exchange Rate Outlook Downgraded over Renewed Brexit Fears from Ryanair?s O?Leary

Pound Sterling to Euro (GBP/EUR), US Dollar (GBP/USD) Exchange Rates Could Reverse Recent Gains

Although Pound Sterling (GBP) exchange rates have proven rather resilient lately, with the GBP/EUR and GBP/USD currency pairs climbing to multi-week highs, the Pound may be about to experience a reversal of fortunes.

Nobody knows business like business people. That much is a given, so when leading budget airline Ryanair’s Chief Executive Michael O’Leary gave his verdict on the current situation in the UK economy, holders of the Pound Sterling (currency : GBP) sat up and took note.

Post Brexit Business Concerns Could Weigh on Pound Sterling (GBP) Exchange Rates

Although recent UK data has been fairly positive, concerns that the UK's decision to Brexit could have a negative impact on the country's long term economic outlook could see Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates reverse recent gains.

Following an announcement that his airline will be basing all 50 of its new planes outside of the UK and in continental Europe thanks to the uncertainty engendered by June’s vote for Brexit, O’Leary expressed significant reservations about what the post-Brexit prospects of the domestic economy, stating that,

‘We're being very cautious about the amount of capacity we're allocating to the UK over the next two or three years until we get some kind of indication of what Brexit will look like.’

O’Leary went on to confirm that, ‘none of the new aircraft we take delivery of next year will be based here in the UK and already you can see the Brexit decision is costing real jobs, real visitors are being lost and real investment is being postponed.’

Pound Sterling Down from Best Levels as O'Leary Comments Weigh on GBP Exchange Rates

O'Leary's commentary saw the Pound slide against both the Euro and US Dollar.

He went on to voice substantive reservations regarding the competence of UK politicians, stating that,

‘there's a bunch of headless chickens here, they don't know what they voted for and have no idea where they're going to finish up, so we have to be cautious with our expansion next year, which is a pity.’

O’Leary’s diatribe followed a distinctly threatening report from the Japanese government, published over the weekend, which warned of a wholesale removal of Japanese businesses from the UK if Brexit talks between London and Brussels did not yield considerable concessions.

Pound Sterling GBP Exchange Rate Forecasts Downgraded Today

Fears over the potentially negative effect which Brexit will have on the local economy were stoked by Tuesday’s comments in the UK parliament by freshly-installed Brexit Minister David Davis. When asked about the potential for the UK to remain in the European Single Market following Brexit, Davis told UK policymakers that his,

‘government is looking at every option but the simple truth is that if a requirement of membership is giving up control of our borders, I think that makes it very improbable.’

Although the comments were rejected as Davis’ own position by UK Prime Minister Teresa May yesterday, the suggestion from a senior cabinet minister that Britain will not be able to freely trade with the remaining 27 EU states post-Brexit caused analyst to downgrade their forecasts for the Pound Sterling (currency : GBP).

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