It was a very quiet start to the week, with no major economic data releases from the UK, US and Europe. There were the usual political rumblings, as seven MPs resigned from the Labour party. However, all of them have decided to keep their seats in Parliament and will now sit as an independent group of MPs. Perhaps the timing could have been better, what with the continued Brexit uncertainty, but they say they can no longer support Labour’s Brexit stance and the allegations of antisemitism.
Speaking of party splits, Theresa May is facing a new confrontation with the European Research Group over the Irish backstop. The Brexit-supporting ERG members are annoyed that the Prime Minister might put her Brexit deal to Parliament again without having secured any changes to the withdrawal text. Eurosceptic Tory MPs have repeatedly made it clear that they will not vote for a deal that does not remove an indefinite Northern Ireland backstop.
Concerns that the Tories will eventually split over May’s strategy have led to Tory donor Jeremy Hosking, registering a new party that will champion a hard Brexit in the event of a snap election. Hosking, who financed several pro-Brexit Tory candidates at the last election, says that a no-deal Brexit is the only way of securing the right deal with the EU in the long term.
The pound strengthened against the dollar as the UK Cabinet Office Minister, David Lidington, indicated that the government might yet be able to renegotiate the Brexit deal, or possibly delay the withdrawal from the EU. The news came following reports that a cross-party alliance is planning to mobilise the public and politicians in the final six days before 29 March in a bid to highlight public anxiety about the two options May is offering. The ultimate aim is to seek a public vote on the type of Brexit the UK gets and if the options are rejected, the UK would probably remain in the EU on its current terms.
World stock markets hit their highest level of 2019 yesterday, as optimism is increasing that the US and China will come to an agreement that will end the trade war. Talks appear to be making good progress at the moment which is obviously good news. However, Trump had to go and spoil things again, as there are worries he will impose new tariffs on Europe’s car industry. The US Department of Commerce has filed a report outlining whether the EU auto industry is a national security threat.
Today we will see average earnings and unemployment figures from the UK, as well as labour productivity figures for the fourth quarter of 2018. In Europe, we will see the ZEW economic sentiment indices from Germany and the eurozone, and December’s construction output figures.
As the clock tickets down on Brexit, do make sure to protect any future transfers. A forward contract lets you lock in a fixed exchange rate, so you know exactly how much you’re paying. Speak to your Personal Trader on 020 7898 0541 to find out more.