The British pound moved broadly lower on the week, driven by a mix of factors including a renewed U.K. lockdown, expectations of more stimulus from the Bank of England, net negative U.K. economic updates, and as always….Brexit.
United Kingdom Headlines and Economic data
Monday:
UK manufacturing upturn continues in October despite further loss of growth momentum
Boris Johnson announces month-long national lockdown of England – “The lockdown will commence Nov. 5 and end Dec. 2, when the country will return to the tiered system based on the latest data.”
Brexit Negotiators Move Close to Breaking Impasse Over Fish
Tuesday:
Big volatility for Sterling during the Asia trading session, highly likely driven by the U.S. election headlines from the U.S. as votes had started to be counted. Global risk sentiment moved back and forth the flow as traders bounced back between fears of a long wait before we get the results, and false claims by Trump of winning the Presidential bid.
Brexit talks fail to agree on fisheries, two other issues
- “Irish Foreign Minister Simon Coveney said time may run out to strike a deal”
- “Any deal should be agreed by Nov. 15 so it can be ratified by the European Parliament before Britain’s standstill transition out of the EU expires at the end of the year.”
Wednesday:
UK Service sector recovery slows sharply during October – New orders decline for the first time since June and we saw a sharp drop in employment.
EU’s Barnier says ‘very serious’ gaps still in Brexit trade talks
Thursday:
Chancellor Rishi Sunak to extend furlough scheme to end of March – “the scheme will pay up to 80% of a person’s wage up to £2,500 a month. He told the Commons that the government will review the policy in January.”
Royal Bank of Scotland Report on Jobs:
Permanent appointments fall at quicker rate in
October
U.K. Construction growth slows in October
Bank of England chief wants lenders to take their own decisions to cut shareholder dividends
Bank of England boosts bond buying as new coronavirus lockdown begins – Along with maintaining its main lending rate at 0.1%, the Bank of England’s Monetary Policy Committee (MPC) voted to expand its target stock of U.K. government bond purchases to £895 billion. This was a highly anticipated outcome and with the MPC largely avoiding negative rates talk, it’s likely traders reduced short positions to send Sterling higher on the session.
Friday:
EU Commissioner Breton sees 50/50 chance of Brexit deal
Average UK home costs more than £250,000, says Halifax – 7.5% higher than a year ago.
