Currency Note GBP

GBP: EU won’t get divorce payment in event of no deal

 

With no economic data releases from the UK yesterday, attention turned to political events. In Prime Minister’s Questions, Theresa May told MPs that if the UK leaves the EU without a deal, the EU won’t get the £39 billion ‘divorce payment’ that has previously been agreed. It is still unclear what the UK’s legal obligations to the EU are, but May implied that without a deal, the EU will not be getting the full amount.

Meanwhile, the hard Brexit European Research Group accused May of failing to challenge the EU on the Irish border issue. The in-fighting looks as if it is going to continue for some time yet, especially as May is insistent that the Chequers plan is the best hope of securing a deal with the EU.

The highlight from the UK today is the BoE interest rate decision. It is pretty much certain that rates will be held at 0.75%, although we might see some policymakers voting for a hike. The 9-0 vote in favour of hiking rates last time around was surprising, so will there be some in favour of hiking to 1%? We will find out around 12:00pm.

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