Blog

Tory/DUP deal by next Thursday

• Posted by currencies in Bank of England, Bremain, Brexit, Budget, Currency, Dollar, Economy, EUR, GBP, Inflation, Mark Carney, Prime Minister, Retail Sales, Sterling, UK, Uncategorised
• June 22, 2017
• No Comments

Sterling traded slightly below $1.27 today, investors treading water after a split at the Bank of England over monetary policy added further uncertainty to the outlook for Britain’s economy as it leaves the European Union.

Barely a week after three members of the central bank’s eight-strong rate-setting committee voted to hike record low interest rates, two of the Bank’s top officials gave opposing signals on the Bank’s stance towards interest rates.

Governor Mark Carney in a speech on Tuesday said it was not the right time to raise interest rates, while the Bank’s chief economist Andy Haldane separately said he expected to vote for a rate rise later this year.

Investors were also following political developments, with Prime Minister Theresa May’s due to present to EU leaders her approach to giving guarantees to EU citizens over their rights in Britain.

After a snap election eroded her Conservative Party’s majority in parliament, May is still in talks with Northern Ireland’s Democratic Unionists’ Party to form a minority government.

Finance minister Philip Hammond said he was confident May would strike a deal with the DUP to gain support for her minority government, and DUP lawmaker Jeffrey Donaldson said there was a “very good” chance of a deal by next Thursday.