Following a stronger start to the day, the pound weakened in the afternoon yesterday after the Bank of England’s monetary policy meeting. It’s choppy this morning ahead of the House of Commons debating and voting on Boris Johnson’s Withdrawal Bill. The bill, including an amendment to prevent any extension to the Brexit transition period, is expected to pass.
As expected, the Bank of England kept interest rates on hold yesterday. However, the result echoed last month, with two policymakers voting for a 0.5% rate cut. The minutes also indicated that the other seven would be prepared to cut rates if Brexit uncertainty became entrenched or global growth fails to stabilise.
The Bank also said that there’s little chance of significant growth this quarter, ahead of GDP figures which are due to be released later today. It has also been announced that the Financial Conduct Authority chief, Andrew Bailey, will succeed Mark Carney as the new BOE governor.
The pound also weakened due to disappointing retail sales data, which slowed sharply in November and came in well below expectations. It’s thought that shoppers were keeping a tight grip on spending due to Brexit uncertainty and ahead of December’s election. However, consumer confidence figures came in positively this morning, showing figures at their highest since July.
More than 30 bills were announced during the Queen’s Speech, which took place in the House of Commons yesterday. Seven of the bills were Brexit related, with the Withdrawal Agreement Bill to be put to the House today. There was also a pledge to increase funding for the NHS, which marks an increase to previous spending under a Conservative government but doesn’t match the previous levels of investment seen under Labour governments.
