UK Politics

The Pound was carrying losses against many currencies for the week on Friday with some having followed the release of Office for National Statistics (ONS) figures revealing what appeared to be a crisis of confidence in the UK and Sterling last quarter. 

The dramatic plunge in sterling and UK gilt prices following Kwarteng’s unsupported tax cuts announcement drew many to radical conclusions.

Reports out overnight suggest the countdown to Prime Minister Theresa May's departure have begun, and this could make for a weaker Pound Sterling over the summer as the next leader of the country pursues a 'Brexit at all costs' policy.

A Tory thrashing in local elections should focus minds on the British Pound says a leading foreign exchange analyst we follow.

Gains by Sterling on news of May's reprieve ultimately proved short-lived and we are told by a number of currency analysts that markets will remain nervous of holding Sterling amidst growing concerns that the ongoing Brexit impasse and delay are damaging the economy, we are told.

The British Pound is flat at the start of the new week but political intrigue in Westminister is expected to start building as MPs return from their Easter break.

The Pound is subject to global currents sweeping the foreign exchange markets with a broadly softer U.S. Dollar aiding the GBP/USD higher. However, rumours on the state of Labour-Conservative Brexit talks and UK inflation data out mid-morning are likely to form the focus of Sterling trade over coming hours.

Foreign exchange markets could once again start taking instruction from UK voting intention polls, amidst an increasingly popular view the country is heading for a general election.

The key drivers for Sterling in the immediate term are 1) the ability of Labour and the Conservatives to strike a cross-party Brexit consensus and 2) the shape of any Brexit delay offered by the EU to the UK, which both lead to 3) growing fears for a snap general election.

Outlook for the British Pound has improved notably on the back of the planned fiscal expansion announced by the U.K.'s Treasury.

Growth forecasts for the U.K. economy in 2019 have been upgraded by the Office for Budget Responsibility announces Chancellor Philip Hammond however Sterling will await clear progress in Brexit negotiations before pricing in the good economic news.