020 7898 0500On Friday we saw sterling resume its downward trend following a day of respite as the debate over Brexit continues to simmer. The catalyst was comments from Foreign Secretary Boris Johnson who stated that the UK will be evoking Article 50 in the early part of next year. He went on to say that the UK may not require the whole two years to exit the bloc. However, Prime Minister Theresa May stepped in to dampen down his pronouncement, with a Downing Street spokesman insisting the Prime Minister was not committed to any timetable. As a source from Downing Street emphasised, ‘the decision to trigger Article 50 is hers’.
However, unrest within the party reared its head on Friday as Theresa May suffered her first ministerial resignation. Treasury minister Lord O’Neill, a key figure in pushing the Conservatives’ Northern Powerhouse agenda, has resigned from the government. The former Goldman Sachs executive was also a key advocate of the UK forging strong links with China. It is thought that the fiasco surrounding Hinkley Point and the grammar school project were a large part in his resignation.
Looking to the week ahead, we have additional indicators which should give the market further insight on how the economy is performing. On Tuesday, another reading of consumer spending in the form of the CBI realised sales. Whilst we have had the majority of spending figures the market will keep a close eye on the figures as spending makes up 70% of Gross Domestic Product (GDP) numbers. On Thursday, the UK’s mortgage numbers and lending figures are set for release. However, the highlight will be on Friday as the final growth numbers for quarter two and the current account are due to be released.
