On Tuesday sterling’s (GBP, pound) slide was reversed from the losses made on Cyber Monday as credit data posted a more positive reading than expected. Lending in the UK expanded last month at the fastest annual pace in 11-years and mortgage approvals were once again stronger than expected. Despite the Brexit vote and the resulting uncertainty, the UK economy remains resilient. Attention has shifted slightly from Brexit towards how the UK economy will perform once Donald Trump takes control of the world’s largest economy. In addition, sterling is likely to be more resilient against the euro (EUR) ahead of a host of elections in Europe in 2017.
The UK’s banking sector will come under the microscope today with the Bank of England (BoE) due to release the latest bank stress test results, in addition to the BoE Financial Stability Report. Given the recent demise of sterling and the uncertainty in the political sphere moving forward, the market will keep a close eye on the resulting data.