Theresa May delayed the meaningful vote yesterday after conceding that she would have lost it by a large margin. The opposition to the Irish backstop proposals meant that the prime minister has deferred to vote and will not proceed ‘at this time’. No details were given on when the vote might take place, although there was a suggestion that this could be next January.
The pound had a terrible day, weakening to fresh lows against the euro and dollar. The CBI responded to May’s decision by saying that the delay was a blow to UK businesses and there is a risk we are sliding towards a national crisis. It is incredible that we have been negotiating for months and months, and then the deal that May secures cannot be voted on because it will be rejected. It begs the question what will happen next, especially given that the EU has been fairly clear that it will not renegotiate.
The UK trade deficit widened to £3.3 billion in October from an upwardly revised £2.33 billion the previous months. Meanwhile, new orders for construction tumbled by a whopping 30.7% in the third quarter of 2018. It is the sharpest decline in construction orders since the first quarter of 2009. Industrial production dropped by 0.6% in October, while manufacturing production fell by 1%. Year-on-year construction output did increase by 3.8% against an expectation of 3.2%, but year-on-year GDP came in at 1.5% against an expectation of 1.6%.
It is another busy day for the UK, with claimant count change figures for November, as well as the unemployment rate and average earnings for October. There will also be reaction to May’s decision to delay the meaningful vote.