Pound expected to drop by almost a fifth and making it nearly one-for-one with US dollar
Prediction made by Deutsche Bank who expect exchange rate low by the end of the year because of Brexit but plan to go ahead with new London HQ
CITY giant Deutsche Bank has said it expects the pound to drop in value by almost a fifth by the end of the year.
The German bank said pound sterling could be traded for as little as $1.06 US dollars at some point over the next time months.
They believe the decreased value will result from Brexit and the uncertainty it has caused in the markets with Theresa May due to trigger Article 50 on March 29.
The procedure will start the formal two year negotiation process on how Britain leaves the EU with the government hoping to agree a favourable deal with Brussels.
The prediction is one of the darkest yet from the world’s large banks with such a fall also causing the Euro to become as valuable as the pound, according to Mail Online.
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In its 45-page report on the possible consequences of Brexit, the bank said: “We do not see sterling (currently) fully pricing a hard Brexit outcome.
“Combined with limited adjustment in the UK's current account deficit and slowing growth, we see further downside, and forecast $1.06 in by year-end.”
However, despite the gloomy forecast, Germany’s biggest lender is understood to be pressing ahead with plans to develop a new headquarters in London.
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It is currently in talks over a 500,000 square foot office at 21 Moorfields, a site owned by Land Securities above Moorgate underground station, with an aim of moving in by 2023.
Such a move would represent a commitment to London as a financial hub in Europe, even after Brexit, with a 25-year lease on the property expected.
Brexit campaigners welcomed the proposal with Tory MP John Redwood saying: “Well done, Deutsche Bank – London is where the big liquid markets are.
“We buy Germany's cars and they buy our financial services. The City at the moment is one big building site and it all seems to be renting and selling very well.”
In a message to staff Garth Ritchie, Deutsche Bank's UK boss, said: “The move underlines the bank's commitment to the City of London and the importance it attaches to being an employer of choice in the capital. It will advance the bank's strategic goals.”
The bank currently has around 7,000 staff in the UK and its commitment to the City differs to the moves made by some of their rivals.
Goldman Sachs announced earlier this week that it will start moving hundreds of staff out of London before a Brexit deal is struck while HSBC said it would relocate 1,000 jobs from Britain to France.
JP Morgan have said they could shift around 4,000 of its 16,000 UK staff out of Britain while UBS have said they could move up to 1,500 of its London staff to Europe.
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