Sterling surges on renewed hopes of a deal

Sterling surged on Friday (11 Oct) to a three-month high amid investor optimism about a last-minute Brexit deal between Britain and the European Union.

Against the dollar the pound rose 2% to $1.2685, and against the euro was up 1.4% at 87.2p.

The currency has rallied more than 3% since Thursday, its biggest two-day gain since before the June 2016 referendum on leaving the EU.

Many UK-focused shares also surged, with Royal Bank of Scotland up 15%.

Brexit Talks Improve 

On Friday(11 Oct) , EU Brexit negotiator Michel Barnier said he had had a “constructive” meeting with his British counterpart, Stephen Barclay. That followed talks between the Irish and British prime ministers on Thursday, after which a joint statement spoke of “a pathway to a possible deal”.

But UK Prime Minister Boris Johnson said there was “a way to go” before a deal could be reached.

The UK is due to leave the EU at 23:00 GMT on 31 October.

A European leaders’ summit next week is seen as the last chance to agree a deal before that deadline.

Mr Johnson put forward revised proposals for a deal last week, designed to avoid a hard border on the island of Ireland after Brexit.