LONDONThe most noticeable economic impact of Brexit on the average Brit in the past year has been the monumental drop in the value of the pound since the vote.Holidays have become more expensive and imported goods have gone up in price.Sterling witnessedthe largest single intraday drop against the dollar in its historythe morning after Britain voted to leave the EU in June last year.The pound continued to slide for several months afterwards, with wild swings in value, a flash crash, andmoves driven by political developments.Thenthe market calmed down, Brexit stopped taking a toll on sterling, and everything seemed to getting back to normal. But as Brexit talks start to falterreaching "deadlock" last weekthe pound is in focus once again.There now seems to be a genuinely possibility that Britain will end up with the hardest possible Brexit, in which it drops out of the EU without any sort of deal, reverting to WTO trade terms.If that scenario were to come to pass, it seems almost inevitable that the pound would drop even further, breaking new records for its lowest modern levels against the dollar, and possibly reaching parity against the euro for the first time in history.Business Insider looked at the forecasts for the pound of five analysts at major financial institutions in the event of a soft Brexit. This week, we've taken the same analysts and provided their predictions for a hard Brexit in which the UK drops out of the EU without a trade deal.Most of the five predict that sterling will drop to a range between $1.10 and $1.20. The lowest end of that spectrum would represent a 17% drop from current levelswhich already mark a more than 10% from sterling's pre-referendum high.Check out the forecasts below.JPMorgan Asset Management: $1.15 by the end of 2019Forecast:$1.15 by the end of 2019, the pound and the euro will hit parityAnalyst:Roger Hallam, currency chief investment Officer at JPMorgan Asset ManagementWhat they say:If Britain fails to secure a trade deal with the EU and drops into WTO rules, it could underestimate "the complications of trading on purely WTO terms," which in turn could lead to a "sharp drop in exports, business investment, confidence." This, Hallam says, might mean the UK flirting with a recession, and cause the Bank of England to cut interest rates to 0%, "reversing hikes delivered during late 2017/early 2018."All of these factors, Hallam believes, would drive sterling to parity with the euro, and just 1.15 against the dollar.ING: $1.15Forecast: $1.15Analyst:Viraj Patel, FX Strategist at ING.What they say: "For GBP's politically-driven weakness to persist and extendall the way towards parity against the EUR (and GBP/USD to 1.15), we would argue that 'hard Brexit' risks would need to notch up another gear.In reality, the only way this could occur over the next six months is if we get a nightmare Brexit scenario in October - that is a complete breakdown of UK-EU negotiations and the tail risk of a cliff-edge Brexit becoming the central scenario. Worth noting that we also forecast implicit EUR weakness under this scenario; certainly the EZ economyas well as ECB normalisation prospectswould take a hit under any cliff-edge Brexit outcome."HSBC: Around $1.10Forecast:Around $1.10Analysts:Dominic Bunning, David Bloom, and Daragh MaherWhat they say:"The UK government has argued at times that no deal is better than a bad deal, but we would expect no deal to be a very bad deal for GBP. The uncertainty unleashed regarding every aspect of the UKs relationship with the EU (Article 50 states that EU treaties will cease to apply to the UK at the end of the negotiating period) would be enormous."This would of course affect the treatment of trade in goods and services, but it would also touch on numerous other areas including citizens rights, air travel and the Irish border for example. We would expect GBP-USD to trade around 1.10 under this no-deal scenario, below the lows seen during the flash crash of October 2016."See the rest of the story at Business Insider
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