020 7898 0500At the start of yesterday, sterling (GBP, pound) was poised to either strengthen or weaken significantly. This was based on two factors: the inflation data and Prime Minister May’s speech on Brexit. By the end of the day sterling had strengthened significantly.
Starting with inflation: the consumer price index – the Bank of England (BoE) preferred measure of inflation – saw it increase to 1.6 percent, which was more than expected. This followed BoE Governor Mark Carney’s rather ambiguous statement that the next move on interest rates could be in either direction. The safe money at the moment is on a hike, given the faster than expected rise in inflation.
Then came the main event of the day: Mrs May’s much-anticipated Brexit speech. Her stance on Brexit wasn’t exactly a secret before she took the stand, and having done so she reiterated that the UK “cannot possibly” remain within the European single market, highlighting that staying in it would mean “not leaving the EU at all”. Mrs May went on to say that she would push for the “freest possible trade” with European countries and other partners around the world. She went as far as confirming the Government had lost its appeal to the Supreme Court with regards to how Article 50 will be triggered, stating that Parliament would get to vote on the final deal agreed between the UK and the EU.
Though the contents of Mrs May’sspeech was largely anticipated, the Prime Ministers tone and more collaborative stance helped Sterling rally.
Today the key employment data and average earning are due for release.
