Marinov: Hard Brexit Fully Priced In to Cable Rate

The video discusses the impact of Brexit on the pound, highlighting that the pound's weakness against the dollar is largely priced in, but further depreciation against the euro is expected. The potential for euro sterling gains is linked to earnings repatriation by eurozone multinationals. The discussion also covers the political risks in Europe and the potential for parity between the euro and pound. The consequences of a hard Brexit are explored, including reduced productivity and increased inflation, posing challenges for the Bank of England. The video concludes with a focus on economic risks and consumer behavior in the UK.

What is one potential factor that could support the euro against the pound?

• Increased UK exports

• Stronger UK economic growth

• Repatriation of earnings by Eurozone multinationals

• Higher UK interest rates

Which upcoming political events are mentioned as risks beyond Brexit?

• Italian Referendum

• US Presidential Election

• Dutch General Election and French Presidential Election

• German Federal Election

What is a potential outcome if euro-sterling parity is achieved?

• Higher UK inflation

• A selling opportunity for the euro

• Stronger UK economic growth

• Increased liquidity in the markets

What are the two key risks associated with a hard Brexit?

• Increased foreign investment and economic growth

• Productivity drop and limited access to productive workers

• Higher taxes and increased immigration

• Lower inflation and stronger pound

What challenge does the Bank of England face in the context of a hard Brexit?

• Increasing foreign reserves

• Fighting cost-push inflation

• Managing capital inflows

• Reducing interest rates