The pound was strong yesterday and is up this morning, showing little reaction to mixed data and the rhetoric surrounding Brexit. GDP figures released yesterday morning showed that the UK economy has contracted at a 0.2% quarterly rate, but grew by 1.3% in the year to end-June, signalling continued support from household spending.
Boris Johnson is expected to reveal a detailed plan for Brexit in a series of calls to Brussels, followed by a formal text which is due to be delivered tomorrow. The reception that this receives may determine whether the UK can secure a deal with the EU before October 31st.
The Conservative Party conference continued yesterday, with Chancellor Sajid Javid promising a “significant economic policy response” to a no-deal Brexit. He did not give any details as to what this response would involve, and admitted that he doesn’t know what a no-deal would cost in the short term, saying “I don’t think anyone really knows a full proper answer to that question.”
Javid was called on by the Labour Party to make a statement in Parliament on possible movements against the pound in the lead up to a possible no-deal Brexit. Simon Clarke, a junior finance minister, said that the government does not comment on the level of sterling in general. He also dismissed claims made by former Chancellor, Philip Hammond, that Boris Johnson was “backed by speculators who have bet billions on a hard Brexit.”
Opposition parties have confirmed that they won’t be calling a vote of no- confidence against the Prime Minister this week, with Jeremy Corbyn saying that he will back it “at a point we can win it and take no-deal off the table.”
