The pound remained under pressure yesterday, dropping to a four-month low against the euro due to coronavirus fears and expectations of turbulent UK-EU trade negotiations. Sterling has recovered slightly this morning, however, risks remain.
Market expectations of an interest rate cut from the Bank of England have now risen to 65%, perhaps signalling that a rate cut is being priced in. The next monetary policy meeting will take place on the 26th of March.
The first round of UK-EU trade talks is now underway until Thursday. The markets are nervous about the progression of these talks, especially after the negotiating mandates were released last week.
Manufacturing PMI for the UK came slightly below expectations yesterday, but the figure remained within expansion territory. Today, we’ll see the release of Construction PMI.
