Brexit piles pressure on Sterling despite positive data

Having started the week on the back foot, the pound has recovered marginally against its counterparts. Last weekend, Theresa May suggested that the UK might leave the single market if there was no compromise on the free movement of people. The comments have been interpreted by foreign exchange markets as pointing towards a ‘hard Brexit’, which pushed Sterling lower across the board at the start of the week.

The Prime Minister was quick to lay blame on the media for misconstruing her remarks and Sterling has managed to recover slightly amidst positive data from the economy. Forecasts show that inflation is on an upward trajectory for 2017 and the FTSE is trading at record highs.

Carney wary of Brexit dangers

Governor of the Bank of England, Mark Carney, spoke yesterday in front of the Treasury Select Committee. His speech warned Brussels that the lack of a transition deal on Brexit negotiations will hurt the EU more than it will the UK. However, the sense of subdued optimism was quickly squashed as he also warned that Brexit could “amplify” four other dangers to the UK economy including the current account deficit, further weakness in Sterling, mounting consumer credit and a weaker commercial property market. With no economic data out of the UK today, markets will continue trading on news around Brexit.

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