Following the election result in the UK last week Sterling has maintained its downward projection as uncertainty surrounding the nature of Britain’s exit from the EU clouds investors.
Prime Minister May had been set to employ a harder style Brexit with her promise of ‘a good deal or no deal’ however her failing to obtain a substantial majority in the polls last week has weakened her positon. A much softer than anticipated exit is now being mooted by political correspondents and market analysts however with negotiations not set to begin until next week this is merely speculator.
Sterling, being a sentiment driven current has no significant reason to strengthen while the country lies in political limbo. Economically, central bank policy is something that needs to be watched closely with the Bank of England set to meet on Thursday. Despite no rate hike forecasted, attention needs to be paid towards the rhetoric from Governor Carney about the overall health of the UK economy. Should inflation continue to rise and wages continue to flat line there may be some further downside surprise in Sterling.
European Interest Rates More momentum on rate cuts in the Eurozone as expectations grew for cuts starting in March and totalling 140bps in 2024. Equally in the UK cuts of 130bps starting in June are being pencilled in to market calendars. What this means is that GBP/EUR is looking more than especially good value at […]
UK With 2 year mortgage rates less than 4% and 5 years at 4.39%, the implication for the housing market which has responded by a modest 0.2% rise, is that rates are soon going to fall and that the UK economy is stabilising. While there will doubtless be setbacks to this rose tinted scenario, for […]
UK Labour market The Bank of England yesterday broke cover to drive the message home that due to the UK’s labour market remaining tight, it was premature to start talking interest rate cuts and it was not just Governor Bailey who was calling for higher for longer interest rates but also his MEPC colleague Jonathan […]