020 7898 0500With no major economic data releases from the UK on Friday, any sterling movements were likely to be caused by events elsewhere, or Brexit-related news. Reports on Thursday afternoon that Theresa May faces a potential revolt from her Cabinet certainly didn’t imbue the markets with any confidence and the pound dropped against the dollar from the highs it reached on Thursday.
It seems quite likely that the pound will suffer from significant volatility in the coming weeks and months, and in which direction almost exclusively depends on how Brexit negotiations go. Investors were buoyed throughout the middle part of last week, but with no confirmation on the details of an arrangement, the drop back was to be expected.
Nothing on the schedule today, but tomorrow sees the unemployment rate for August as well as average earnings for the same month. Economists are expecting a drop in wages, which would appear to be at odds with what Andy Haldane said last week. On Wednesday, we will see inflation for September which is expected to nudge up to 2.8% from 2.7%.
