Sterling weakened further yesterday as nerves surrounding negotiations between the UK and EU continue. After his speech at the beginning of the week, there are concerns that the Prime Minister will take a hard-line approach to trade negotiations and could step away from talks if the EU doesn’t agree to UK requirements. The pound is slightly stronger against the euro this morning.
There have also been reports that the financial services sector is expected to be a prime target of the EU in upcoming negotiations and that they will be looking to impose tougher financial regulations on the UK.
French Finance Minister, Bruno Le Maire, said that British financial services firms will get no access to the EU markets after Brexit unless they agree to respect EU rules.
It’s light on data for the UK today, but Halifax House Price Index came in this morning, showing that house prices in the UK went up 4.1% year-on-year in January of 2020, slightly higher than a 4% rise in December and well above market expectations of a 3% increase.
Next week, Boris Johnson is expected to carry out a cabinet reshuffle, which will be watched closely by the markets.
