- Posted by Shyam Gokani in Uncategorised
- December 7, 2016
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Sterling posted its biggest slide in two months on Wednesday after poor British industrial output data added to the sense that a month-long recovery in the currency may have run its course.
The weak performance by manufacturers may raise doubts about how much of a boost factories are getting from the big fall in sterling since Britain voted in June to leave the European Union.
The monthly slide was largely attributed to a temporary shutdown of a major oilfield but it fuelled speculation that the economic data may finally be turning lower after proving more robust than many had forecast after the Brexit vote.
So far investors have been of the mind frame that the country is overcoming its major economic headwinds but today’s number clearly shows how much off beat they are with respect to reality.
Prime Minister Theresa May’s on Tuesday accepted the opposition Labour Party’s demand she gives details of her plan for leaving the EU before formal talks begin, but she asked parliament to back her target of launching the talks in March.
That provides no new details on what has become the key issue for markets: how “hard” a break from Europe she will aim for. It reduces the chances of a delay, previously read by investors as supportive of greater compromise in the process.
With no outcome of the decision until January, main focuses are the ECB meeting tomorrow and the US interest rate decision.