Sterling unmoved by Halloween Brexit delay as investors ‘desensitised to Brexit shambles’

Sterling investors have become “desensitised to the Brexit shambles” as the currency remained broadly unmoved by EU leaders granting an extension to Article 50 until 31 October.

The pound remained steady at $1.308 this morning despite the announcement that Brexit would be delayed until Halloween in the early hours of the morning.

Read more: Pound set to rise three per cent if Brexit deal looks likely

Analysts said the market had priced in an extension a long time ago and that a sterling rally was now some way off.

“Investors are almost entirely de-sensitised to the unfolding shambles,” Guy Foster, head of research at Brewin Dolphin said.

While the agreement struck in Brussels last night avoids a no-deal Brexit tomorrow, a scenario that would harm the pound, the currency has barely moved since.

“The extension has done nothing for the pound which priced this in a long time ago and remains towards the lower end of its trading range,” OANDA analyst Craig Erlam said.

“In the absence of a Brexit deal and with the economy underperforming, facing another six months of uncertainty and maybe no rate hike as a result, the bullish case for sterling near-term may have significantly diminished,” he added.

Industry groups welcomed the avoidance of a no-deal Brexit tomorrow but warned that the continuing uncertainty was hitting businesses across the UK.

Read more: Tusk warns UK: 'Don't waste' Halloween Brexit delay

British Chambers of Commerce director general Adam Marshall said: “Businesses will be relieved but their frustration with this seemingly endless political process is palpable.

He added: “It would be a disaster for business confidence and investment if a similar late-night drama is played out yet again in October.”