It seems that overwhelmingly, Boris will be the next UK Prime Minister. On the 22nd July, it will be announced who is the latest UK Prime Minister following the final results of the Conservative Party leadership campaign, following Theresa May’s resignation. Sterling is at present rangebound with no overly clear direction being established, as the market awaits to find out the latest news.
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Boris is leading the polls for the Conservative Party leadership election and his constant backing of ‘Leave’, and his pursuit of ‘no-deal’ are all factors which might cause sterling pressure. The pound has lost value in recent weeks as the threat of no-deal has risen, under the potential premiership of Boris.
The next two weeks will see this issue remain high on the list of concerns for the pound, expect any sudden changes in the outlook of who will be the next PM, to potentially impact sterling rates. Clients with a position to buy or sell sterling might wish to get in touch with our team to discuss the latest outlook.
Recent economic data last week showed a slowdown in Manufacturing data which has put extra pressure on the UK and raises the concerns of the UK possibly having entered a recession this quarter. Data will now be closely monitored, and tomorrow’s Industrial and Manufacturing survey data will play a big part in determining how the market views the possibility of the UK entering recession.
A key point is that in March, businesses were stockpiling ahead of a possible no-deal Brexit. However, there is little option for such an upturn in October, since many businesses will be stockpiling anyway ahead of the Christmas period.
With the Brexit deadline of 31st October now just 3 months and 3 weeks away, focus will likely be not just on the UK’s political outlook, but also the economic one. So far, economic news had held up relatively well since the EU Referendum vote, the increasing signs this might not be the case would likely see the pound struggle.
Sterling is currently rangebound against many pairs as investors await the latest defining news on Brexit.
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