The pound put in a proper emerging-market performance, alternating daily between first and last position (sometimes jointly) among the major currencies. Over the week it strengthened by an average of 0.2%, adding half a euro cent and one and a half US cents.

To nobody’s great surprise, the government missed its last possible deadline for agreement with the EU on a post-Brexit trade deal. The intention had been to present the European Council with a draft agreement on 19 November. Now, in a triumph of brinkmanship for negotiations that began more than four years ago, the target is 28th December, with officials working through Christmas to prepare the treaty, should there be one. Businesses would be less than delighted at the prospect of altering cross-border operating procedures on the fly, with only three days’ notice though.

To add to this, Britain’s Prime Minister is isolated as a result of the test and trace process, while a senior EU negotiator has caught the infection. Investors expect a deal to materialise, especially since President-elect Biden drew his red line around the Belfast peace agreement, but they are not unreservedly optimistic, which explains the pound’s positioning.

In other news, the UK’s 0.7% headline rate came with a health earning that it is artificially depressed by the temporary reduction of VAT for the hospitality sector. Bank of England Governor Andrew Bailey was more positive, delivering a speech which included the reassurance that, “It’s not all dismal news though.”

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