While journalists reacted to yesterday’s political developments (or lack thereof), the Bank of England governor, Mark Carney, delivered a speech in which he told MPs that investors believe a disorderly Brexit is now less likely. He stated that the financial markets believe Brexit could be delayed, with sterling’s moves in the aftermath of the vote on May’s Brexit plans showing a degree of optimism. He also said that if there was a no-deal Brexit, the UK banking sector was equipped to deal with it.
UK inflation dropped to 2.1% in December 2018 from 2.3% the previous month which is the lowest rate since January 2017. The markets had been expecting a dip, with the drop coming largely because of the lower cost of fuel and air fares. We also learned that Goldman Sachs believes there is a greater chance of Brexit being scrapped.
There are economic data releases on the schedule today, but there will be more than enough to keep us occupied for the foreseeable future.
