The Brexit endgame is upon us. And it has been chaos.
The best way to explain that is using the British pound, which has been a punching bag ever since the UK decided to leave the European Union in July 2016. This chart plots the pound against the US dollar over the course of the last three months of the year:
After activating Article 50 on March 29, 2017 to formally notify its departure, the UK and the 27 members of the EU were supposed to done by mid-October of this year to leave enough time for getting everything ratified by the EU Parliament and the British Parliament. That didn’t happen, and the pound started to slide.
It had a pretty decent revival as the two sides got closer. Those talks culminated in a 585-page withdrawal agreement announced on Nov. 15. The very next day, the Brexit secretary resigned and the pound fell as much as 1.8% against the dollar—one of the biggest one-day declines since the Brexit referendum. It’s been downhill from there as it became clear that the UK Parliament would never back the deal and a vote of confidence was called on prime minister Theresa May, which she survived. The EU watches on, bewildered, calling the UK’s bluff that it is prepared for a no-deal Brexit.
A vote on that deal has now been scheduled for early January (paywall). So don’t expect the first weeks of 2019 to be any better for the beleaguered British currency.