On a day where the Bank of England and European Central Bank did as expected and voted to keep interest rates on hold in the UK and eurozone at 0.75% and 0% respectively, Moody’s issued a warning. The credit rating agency said that Britain’s economy would flounder if we leave the European Union without securing a deal.
Moody’s predicted that sterling would tumble, inflation would soar, and a hard Brexit could drive the UK into a recession. BoE also warned that uncertainty over Brexit has risen in recent times and UK businesses are increasingly worried about the impacts of no-deal. Yesterday was filled with Brexit-related news, with the government publishing its latest round of no-deal Brexit planning documents.
In total, 28 documents were released, many of which highlighted what would happen in the event of a no-deal. Some of the things mentioned include UK driving licenses may no longer be valid on the continent, ships would have to provide security information before they could enter EU ports, mobile phone bills could soar if used in the EU, and – perhaps the most bizarre potential impact of all – the UK would get less warning about space debris crashing to Earth. Leave.EU never mentioned that on the campaign trail.
The US inflation rate fell to 2.7% in August from 2.9% the month before and below expectations of 2.8%. It is the lowest reading for four months and caused the dollar to slide against sterling and the euro. The pound crept above the $1.31 mark for the first time since 2nd August, but traded sideways with the euro. Today’s releases include July’s balance of trade figures from the eurozone and retail sales from the US.
This week has been one of chop and change. As many warn of the impacts of Brexit, others tell us there’s nothing to worry about. The US appears to be on the brink of proposing a fresh round of trade talks with China, then Trump fires a tweet out suggesting they might not meet. It is almost impossible to know what to think – yet another reason to make sure you’ve put in place strategies to protect your money. They’re simple to use and can have a huge impact, so do give your Personal Trader a ring on 020 7898 0541 today.
