Tory Leadership challenger Jeremy Hunt committed himself to pursuing a no Deal Brexit, declaring that if there isn’t an arrangement in place with the EU or a plan to move forward by the 30th September then at that point he would start putting plans in place for a No Deal.
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Hunt’s only real method to power is to commit to the Tory Membership who want a No Deal option to be available and this was possibly more an attempt to make himself more electable. Sterling against the euro yesterday afternoon fell by 0.5 cent before returning back to the 1.12 interbank level by the close of business, a fairly quiet day once again with the same movement we have seen for the last few weeks.
Chancellor Philip Hammond provided a stern warning for both Johnson and Hunt yesterday with regards to the number of promises both potential leaders have been making with regards to future Government spending. Hammond who has overseen a major budget surplus in his tenure warned that these are not sound bites and so far, their policies “greatly exceed” the Treasury’s coffers.
It still appears to be hard to see past Boris winning the contest and with exactly 20 days to go, the campaign is still very much under way. Voting from the 160,000 Conservative party members start next week, with the result due on the 22nd July.
The Bank of England Governor Mark Carney will speak this afternoon which always provides an opportunity for there to be volatility in the market. Carney is renowned for causing sterling to lose value as he is rarely optimistic for the prospects of the UK especially as a real cynic of Brexit.
However, a few members of the Monetary policy committee have suggested that the UK may need to move down the path of an interest rate hike if data continues to remain at a steady level. This could potentially provide sterling with a shot in the arm, however the cautious Carney is unlikely to rattle the cage. Sterling this morning has started the day at the interbank level of 1.12 against the euro so there could be further support as the day goes on.
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