There were no major economic data releases from the UK yesterday, but sterling slid once more against the dollar, following reports that the government could lose the latest Brexit vote. The pound fell below the $1.28 mark to hit a one-month low against the greenback. It also lost some ground against the euro, but the moves were more slight because any Brexit-related news obviously affects the eurozone as well as the UK.
And then came the vote on a government motion, which was defeated by 303 votes to 258. Her strategy failed to win support from the European Research Group who abstained. It weakens May’s already incredibly weak hand. It feels more and more that the UK is a rudderless island, floating towards catastrophe. Any bargaining power we might have had with EU leaders is surely gone now that May just cannot be confident she will gain the support of the Commons.
January’s retail sales figures will be released this morning and are expected to increase from the previous month. Year-on-year, a move up to 3.4% from 3% is expected, while month-over-month, the reading is expected to come in at 0.2% from -0.9% in December. The Bank of England’s chief economic, Andy Haldane, is also set to deliver a speech at 11am. It will be interesting to see if he has anything to add to Carney’s recent Brexit comments.