Sterling was a big mover yesterday, jumping to a six-month high against the euro after the UK’s Brexit Party leader Nigel Farage said the party would not field candidates in next month’s election against PM Boris Johnson’s Conservative Part in seats where the latter already had a majority.
That gave Johnson a better chance of winning an overall majority as the hard-line pro-Brexit party would be expected to take votes from the opposition Labour party instead.
Johnson is still committed to pushing his recently negotiated Brexit deal with the European Union through parliament by the end of January if he wins.
However, many political analysts said the net effect of the Brexit party’s move may be less than it seems because it still threatens to take votes from the Conservatives in key Labour seats it needs to get a parliamentary majority.
In addition, UK gross domestic product data for the third quarter came in below forecasts, although the country dodged a technical recession in the quarter.
A break lower in euro/sterling followed almost a month in which the pair had flattened in a range of not much more than 1 cent. The sterling rally against the dollar left it back at levels seen last week.
The focus had turned to the latest economic data, with British jobs numbers. Economists polled expected the unemployment rate held steady at 3.9% in September. However official figures show that unemployment has dropped to 3.8% giving Sterling a slight boost.