Yesterday was a quiet day for sterling. Following last week’s slide, political uncertainty continues to add to the pressure on the UK currency.
As far as business headlines were concerned, much of the focus was on the sale of General Motors’ Vauxhall to the French car makers that own Peugeot. The biggest concern for the UK is that 4,500 jobs are now at risk in the UK plants in Ellesmere Port and Luton.
On a more positive note, a survey conducted by manufacturing lobby group EEF and consultancy BDO found that UK factories were growing at their most aggressive pace in more than three years, mainly due to the weak currency.
Based on recent data, there are question marks over whether this momentum can be sustained. Friday’s UK manufacturing data will be closely monitored as a result. Also, most of the cars exported go to other EU countries. Following Brexit, if no trade agreement is reached with the EU, exports to Europe may see a significant decline.
The housing sector will come under scrutiny this morning with the release of the Halifax house price index. With the budget later this week, it will be interesting to see how the sector is performing.