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Brexit continues to drag Sterling down

Sterling climbed to a 9-day high today as strong growth data boosted expectations the Bank of England would raise interest rates next week.

Wednesday’s gross domestic product growth for the quarter beat expectations, bolstering the chances of a rate hike after the next BoE meeting on Nov. 2 and fuelling discussions over whether that would be the start of a series of hikes.

GDP growth rose to 0.4 percent in the third quarter from 0.3 percent in the second, beating expectations of most economists for 0.3 percent growth, a performance finance minister Philip Hammond described as “solid”.

Data released this morning showed strong growth in the number of homes British construction companies applied to build over the three months to the end of September.

However, worries about the progress of Brexit negotiations continue to weigh on the pound, with confusion over the details of the government’s strategy adding to a climate of uncertainty.

Mixed messages from British Prime Minister Theresa May and Brexit minister David Davis on Wednesday over the timetable of Britain’s exit from the European Union led to a day of clarifications and breathed new life into political divisions over when British lawmakers would vote on a Brexit deal.

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