LONDON: The British pound tumbled on Tuesday as investors bet Prime Minister Boris Johnson’s Brexit brinkmanship with the European Union could trigger a messy divorce that would sow chaos through the world economy and financial markets.
Sterling crashed through trading barriers, falling to an intraday low of $1.2120 in shallower overnight Asian trade, the lowest since March 2017. The pound has lost 3.6 cents since Johnson was named Britain’s new prime minister a week ago.
Ever since the 2016 EU referendum, the pound has gyrated to the rhetoric of the Brexit divorce: after the result was announced, it had the biggest one-day fall since the era of free-floating exchange rates was introduced in the early 1970s.
Since the 2016 vote, sterling has now lost 28 cents, one of the most significant falls for the currency in recent decades.
“We see more GBP weakness to come,” ING said in a note to clients. “The current sterling meltdown is in line with our view that GBP risks are heavily skewed to the downside given the Brexit uncertainty and rising odds of an early election (our base case).”
Johnson, who was hailed by US President Donald Trump as Britain’s Trump, has promised to strike a new divorce deal with the European Union and to energise the world’s fifth-largest economy after what he casts as the gloom of Theresa May’s premiership.
On entering Downing Street on Wednesday, Johnson set up a showdown with the EU by vowing to negotiate a new deal and threatening that, if the bloc refused, he would take Britain out on Oct. 31 without a deal to limit economic dislocation.
Tour of the union
He told reporters in Scotland on Monday that he wanted to get a new deal but that the government had to prepare for a no-deal Brexit.
When asked about his remark during the campaign for the party leadership that the odds on a no-deal Brexit were a million to one, he said: “Provided there is sufficient goodwill and common sense on the part of our partners, that is exactly where I would put the odds.”
Many investors say a no-deal Brexit would send shock waves through the world economy, tip Britain’s economy into a recession, roil financial markets and weaken London’s position as the pre-eminent international financial center.
Supporters of Brexit say that while there would be some short-term difficulties, the disruption of a no-deal Brexit has been overplayed and that in the long-term, the United Kingdom would thrive if it left the European Union.
Johnson’s ascent has placed an avowed Brexiteer in charge of the British government for the first time since the 2016 EU Brexit referendum.
Johnson will tell Welsh farmers on Tuesday they will get a better deal after Brexit, part of a countrywide tour to win support for his “do or die” pledge to leave the European Union by Oct. 31.
“I will always back Britain’s great farmers and as we leave the EU we need to make sure that Brexit works for them,” Johnson said before arriving in Wales.
“Once we leave the EU on the 31st of October, we will have a historic opportunity to introduce new schemes to support farming – and we will make sure that farmers get a better deal. Brexit presents enormous opportunities for our country and it’s time we looked to the future with pride and optimism.”
UK PM Johnson’s no-deal Brexit gamble hammers sterling
UK PM Johnson’s no-deal Brexit gamble hammers sterling
- Since the 2016 vote, sterling has now lost 28 cents, one of the most significant falls for the currency in recent decades
- Johnson, who was hailed by US President Donald Trump as Britain’s Trump, has promised to strike a new divorce deal with the European Union
Saudi Arabia lifts property sale ban to spur AlUla development
RIYADH: The Royal Commission for AlUla has lifted the suspension on land and property sales in central and southern AlUla, paving the way for renewed real estate activity in the region.
According to an RCU statement, the move aligns with the commission’s commitment to sustainable and inclusive development aimed at enhancing residents’ quality of life.
It also supports Saudi Vision 2030’s tourism objectives, with AlUla projected to contribute a cumulative SR120 billion ($31 billion) to the Kingdom’s gross domestic product by 2035, Phillip Jones, RCU’s Chief Tourism Officer, told Arab News in 2024.
“Lifting the suspension on land and property sales opens wider pathways for urban development and expands residential and investment options, reinforcing AlUla’s position as a prime destination for living and investment,” the statement said.
The decision is also designed to unlock significant opportunities for investors and developers in Saudi Arabia’s real estate sector, strengthen stability in the rental and ownership markets, and support diverse residential and commercial projects. Additionally, it aims to enrich AlUla’s urban identity by blending modern development with the city’s cultural and historical heritage.
Speaking at the TOURISE conference in Riyadh last November, Jones noted that AlUla has expanded its aviation capacity to 30 weekly flights and plans to double its hotel rooms to 2,000. He emphasized that these efforts aim to create a scalable, self-sustaining ecosystem that improves access while preserving the region’s heritage and landscapes.
Jones described AlUla as “a year-round destination,” with peak tourism from October to April driven by festivals, events, and concerts. Increased visitor numbers are already contributing to Saudi Arabia’s economy, in line with Vision 2030 goals.
Located in the northwest of the Kingdom and spanning approximately 22,000 sq. km, AlUla also has a thriving agricultural sector that underpins its economic development. Guided by social, economic, and ecological principles, the RCU has developed a strategic roadmap for AlUla, aiming to diversify the national economy beyond oil and boost GDP growth.
