Sterling (GBP, pound) fell across the board yesterday as economic data surprised the market. Of late the data readings from the UK have been solid, shrugging off the fear of the unknown and the Brexit scenario. Manufacturing growth fell sharply in October, dropping by 0.9% which was as markets had predicted a rise. The size of the drop – the biggest fall in overall production since August 2013 – was a surprise considering the weak pound was supposed to stimulate growth in the sector. Consequently, we saw sterling slide across the board as economist’s pointed out the fall could impact the UK’s Gross Domestic Product (GDP) numbers in the final three months of the year. On a positive note, the unions revealed Tata Steel have made a commitment to secure jobs at Port Talbot and other steelworks across the UK.
Meanwhile, the UK Government is appealing to Supreme Court about Brexit process. The third of the four day hearing continued with no further clues around the outcome of the judgement. Earlier in the quarter the High Court ruled that Parliament must give go ahead – a final decision is not expected until January.
The economic news flow for the UK is quiet today. Therefore, attention will focus on dissecting the final statements from both camps for clues to how the Supreme Court could rule on the Brexit process. Elsewhere, the European Central Bank (ECB) meeting is due today, which could affect the direction of pound/euro (EUR) rate – with the political spotlight falling on both currencies next year.