Posen: If even now on BOE committee I’d have voted against amount hike 40 Mins Ago | 03:20
Sterling is likely to further weaken amid increasing political instability and sluggish Brexit negotiations, according to a respected economist.
Adam Posen, president of the Peterson Institute for International Economics and a former member of the lender of England’s monetary policy committee, told CNBC on Tuesday a decline in the pound is to be expected.
The pound has steadily weakened against significant currencies since the U.K.’s vote in June 2016 to leave the European Union (EU). This is largely due to political instability surrounding Theresa May’s leadership and poor improvement manufactured in Brexit negotiations with EU officials.
Posen said that sterling would continue to weaken due to fundamentals, and not simply the poor progress created by Brexit negotiations so far.
“The day-to-day, month-to-month activities (in the pound) will concentrate on the everyday (Brexit) negotiations,” he said. “But for the British persons and the British overall economy going out more than six months, what’s going to happen is certainly a decline in the pound.
“Regardless of how negotiations go, the U.K. is producing itself less competitive using its largest trading partner, it’s shutting straight down economies of scale where 50 percent of its exports go.”