Produced and edited by Jamie Han,Filmed by Rod Fitzgerald, Additional footage:Bloomberg/Reuters
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What do we want? Brexit! When do we want it? Now!
After six weeks of escalating rhetoric around a do-or-don't Brexit in October, investors are starting to listen. The pound's slump to a 25-month low against the dollar this week reflects the growing risks traders now assign to a hard Brexit at Halloween, an outcome that some investors say could see the pound falling to parity with the dollar. The UK currency has been steadily grinding lower since May, losing 6 per cent of its value against both the euro and the dollar, with the pound notching up 10 consecutive weeks of losses against the European currency.
But since the start of this week, tough talk from the two Conservative leadership candidates, Boris Johnson and Jeremy Hunt, is really filtering through to the exchange rate.
If my judgement is that there is no deal to be done, I will immediately cease all discussions with the European Union.
Hello. How are you? What you can't do is keep saying that we're going to have a deadline of October the 31st. And then say, oh, actually, it's not really a deadline at all, and we could delay beyond October the 30th.
On Wednesday, the pound sank below 1.24 against the dollar after Brussels rejected ditching the Irish backstop. Investors now expect a tough ride going into October, especially if the new prime minister continues to stick to his campaign promise of leaving with or without a deal in three months' time. For now, most investors maintain that avoiding a hard Brexit by another extension is the most likely scenario, but conviction in this call is waning. Several large banks have also raised the likelihood they assign to a no-deal Brexit in recent weeks. As a result, expectations for jerky price swings heading into October are rising.