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GBP: what tone will May strike in her Brexit speech later today?

By Michael Cooper September 22nd, 2017

There was some good news for Britain yesterday as public borrowing figures came in below expectations to reach their lowest August mark since the financial crisis a decade ago. This will be seen as extremely good new for the Chancellor of the Exchequer Philip Hammond ahead of his November budget meeting; it allows for the possibility of increased spending in his budget which could placate those who complain about the Conservatives austerity measures.

The main focus of today is UK Prime Minister Theresa May’s speech in Florence. The markets will be especially keen to see what stance May adopts, whether she outlines any further demands as part of an agreement with the European Union and, most importantly, whether she signals a hard or soft Brexit.

We can expect to see some sterling movement tomorrow following the speech, though in which direction is entirely dependent on what May says and how investors interpret it.

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