#AceBrexitNews FTSE 100 Blue Chip companies make ‘ Hay While the Sun Shone on Monday as it touches a record HIGH on RUMOURS of a ‘ HARD #BREXIT ‘ as the £ FALLS sharply in trading – @AceFinanceNews

#AceFinanceReport – Jan.16: FTSE 100 touches record high as sterling slides on rumours of a ‘ HARD #BREXIT
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FTSE 100 index touched a fresh record high on Monday in choppy trade after sterling tumbled to a three-month low on worries that Britain was headed for a “hard” Brexit from the European Union.

The blue chip FTSE 100 index .FTSE was flat in percentage terms by 0858 GMT, touching a fresh all-time high of 7,354.14 points earlier in the session, outperforming its European peers.

The more domestically-exposed FTSE 250 index .FTMC fell 0.1 percent.

Sterling dropped as much as 1.5 percent following media reports that Prime Minister Theresa May will signal a “hard” Brexit for Britain from the European Union in her speech on Tuesday.

A “hard” Brexit scenario would prioritise immigration controls and bilateral trade deals that would see Britain leaving the EU’s single market and customs union.

Banking stocks .FTNMX8350 were the top fallers, with Royal Bank of Scotland (RBS.L) and Barclays (BARC.L) both down more than 2 percent.

“Having access to the single market is key for (the banks), or indeed if they can’t have access, then what the particular requirements of the passporting might be for them to be able to still do business across Europe,” Dafydd Davies, partner at Charles Hanover Investments, said.

“If it is a genuinely hard Brexit and then they have to look at relocation costs, that could be quite substantial for them. However at the moment, it’s very much a wait-and-see situation.”

A drop in sterling, however, benefits the FTSE 100’s international, dollar-earning firms, giving them a currency-related accounting boost. In 2016, the FTSE 100 was the best performer among major regional indexes in Europe, gaining more than 14 percent.

Mining companies were among the biggest risers among the blue chips, with Anglo American (AAL.L), BHP Billiton (BLT.L) and Glencore (GLEN.L) all up between 0.8 percent to 1.9 percent. Precious metals miners Randgold Resources (RRS.L) and Fresnillo (FRES.L) both rose around 1.2 percent, helped by a firmer gold price.

(Reporting by Kit Rees; Editing by Janet Lawrence) http://reut.rs/2jgjVtV

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#AceBrexitNews – London money markets react prior to Theresa May speech on Tuesday as sterling falls sharply after their understanding of what they see as a HARD #BREXIT with TIGHTER IMMIGRATION CONTROLS and NO ESM ACCESS paving the way to triggering Article 50 in March – @AceFinanceNews

#AceFinanceReport – Jan.16: Hard #Brexit fears crunch sterling ahead of Theresa May speech in Tuesday
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http://reut.rs/2jgnv78 Britain’s pound fell sharply on Monday as concern mounted that the country was heading for a “hard” Brexit from the European Union and its single market, a day before a speech by Prime Minister Theresa May on the government’s plans.

Some British newspapers have billed May’s speech on Tuesday as laying out potential major changes to its preferential single market access and hardening its stance towards an economic bloc that accounts for roughly half its exports and imports.

A spokeswomen for May, who will also attend a gathering of the world’s economic elite in Davos, Switzerland, this week, called the reports about the planned tone of her upcoming speech “speculation“.

That helped steady sterling in London trading but couldn’t repair all the damage. The pound at one point dropped to a three-decade low against the dollar, barring its ‘flash crash’ in October, and as much as 2.5 percent against the Japanese yen. GBPJPY= [/FRX]

“It’s clear that sterling is still very vulnerable to ‘hard‘ Brexit fears,” said Rabobank currency strategist Jane Foley. “The uncertainty is itself also a negative factor, and I think perhaps that’s one of the reasons for Theresa May’s speech on Tuesday, to provide a little bit of clarification.”

With May expected to trigger Article 50 in March, which will start formal EU separation proceedings, the stakes are already rising.

British finance minister Phillip Hammond also gave a thinly veiled warning in a German newspaper interview at the weekend that Britain could use corporate tax as a form of leverage in #Brexit negotiations.

“If we have no access to the European market, if we are closed off, if Britain were to leave the European Union without an agreement on market access, then we could suffer from economic damage at least in the short term,” he said. “In this case, we could be forced to change our economic model.”

However, he added that Britain did not want to close its doors completely to EU citizens who wanted to work in the UK.

Later on Monday, Bank of England Governor Mark Carney, who has delivered a string of warnings about the potential impact of Brexit, will give a speech at the London School of Economics on the policy issues affecting the bank.

The central bank cut British interest rates to a record low and pumped fresh stimulus into the economy shortly after the Brexit vote, but it is now seeing inflation accelerate as a result of sterling’s slide.

The pound has fallen almost 20 percent against the dollar GBP=D4 and nearly 14 percent against the euro GBPEUR= since Britain voted to leave the EU. By 1115 GMT on Monday, it was down almost 1 percent on the dollar at $1.2060 and 0.6 at 87.80 pence per euro.

London’s stock market .FTSE continued to benefit, however: the FTSE was the only major European index not in negative territory. It has surged 25 percent since Brexit, partly because the slump in the pound helps internationally-spread companies that earn in dollars and euros.

Benchmark UK government bonds, gilts, GB10YT=RR also gained as a Europe-wide sell-off left investors moving into traditional areas of stability [GVD/EUR].

May has so far given very little away about what deal she will be seeking, frustrating some investors, businesses and lawmakers.

Tuesday’s speech will stress the need for Britons, who voted for Brexit by 52 to 48 percent in last June’s referendum, to unite around common goals such as protecting and enhancing workers’ rights, her Downing Street office said in a statement.

“Now we need to put an end to the division and the language associated with it – ‘Leaver‘ and ‘Remainer‘ and all the accompanying insults – and unite to make a success of #Brexit and build a truly global Britain,” May is expected to say.

(Additional reporting by Jemima Kelly, editing by Larry King)

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