GBP/USD Trading Steady After Gaining on General Elections Before Brexit Bill Discussions

The Pound is trading steady against the US dollar after strengthening on the confirmation of general elections on December 12 before discussion on the Brexit bill. At the time of writing, GBP/USD is trading at around 1.286 after the call for elections puts a pause on Brexit plans momentarily.

On Tuesday, UK PM Boris Johnson succeeded in passing his calls for early general elections in December as he attempted to garner adequate support for his Brexit bill. A stronger majority for Johnson can help him strong-arm his way in the Parliament and get the latest withdrawal agreement ratified before the new Brexit deadline of January 31, 2020.

Meanwhile, according to think tank NIESR, Johnson’s latest Brexit deal finalized with the EU could cost the UK economy up to £70bn over the next 10 years post departure when compared to remaining within the EU. Britain stands to lose around 4% of its economy by the end of next year alone.

The latest version of the withdrawal agreement and free trade agreement proposed by Johnson could actually contract the British economy. The risk of a no-deal Brexit since the 2016 referendum had already served to shrink the economy by 2.5% as a result of the high levels of uncertainty over EU-UK trade relationship.