020 7898 0500It wasn’t a great start to the week for the pound and it could get a whole lot worse before it gets better. Boris Johnson’s repeated attempts to undermine Theresa May and her Brexit plans has had the effect of creating more and more uncertainty and the markets do not like that. Quite what Johnson expects to achieve by his comments is anybody’s guess and there is growing speculation that a snap general election will be called before long.
The pound didn’t fare much better against the euro, as it weakened throughout the day. It will be fascinating to see what happens throughout the rest of the week, especially given that we have the UK inflation rate and GDP growth rate for the first quarter of 2018 set for release. If inflation holds steady at 2.5% then fears of a UK interest rate rise will diminish further which would likely cause sterling to weaken. If GDP is revised downward as many are forecasting then this would exacerbate the problem and sterling could reach fresh lows against the dollar.
Today we have a speech from BoE Governor Carney, as well as public sector net borrowing figures for April and the CBI industrial trends orders for May.
