020 7898 0500Sterling weakened against the euro and US dollar yesterday as rumours spread that Theresa May would bow to pressure from Brexit supports in her own party with regards to changes to the Brexit customs bill.
The Prime Minister stated that the Chequers deal is not dead and that the amendments were “consistent” with her plan and she was proved correct, although her majority was just three, as the Customs Bill scrapped through Parlament.
A spokesperson for the Prime Minister also stated that there would not be a second referendum under any circumstances, in response to calls from former education secretary Justine Greening.
Yesterday, the IMF maintained its 2018 global growth forecast at 3.9%, but made cuts to the UK forecasts due to negative surprises this year (cuts were also made to the Euro Area and Japan). The IMF stated that the “risk of worse outcomes has increased” due to the “risk that current trade tensions escalate further”.
The main market movers for sterling today, on top of the Brexit related developments, will be a speech from the Governor from the Bank of England this morning where investors will look for clues as to when the UK could raise interest rates. We also have a raft of labour data out of the UK which the central bank use as a key indicator for deciding monetary policy.
