Sterling rises, yet big economic questions still loom large.

Once again it’s been a bumpy week for the UK economy. Whilst an imminent economic crisis has been averted following a raft of government u-turns on economic policy, UK PLC still faces a perilous road ahead.

The week was dominated by news coming out of the Conservative Party Conference which took place between Sunday and Wednesday in Birmingham. Rather than lauding new announcements, this conference saw the Chancellor forced into making a set of u-turns on key economic policy. These have had a positive effect on the markets.

It has therefore been a significantly less turbulent week in the currency markets, after the whirlwind that was last week.

Sterling started the week positively, making gains across all G10 currencies, with the GBP/EUR rate trading above 1.15 for a brief period before slowly losing its recent gains in the second half of the week.

With parliament due to return on 11th October we could see further movements for GBP crosses depending on the reaction. The government is facing serious challenges from the back-benches and could be forced into even more u-turns or potentially parliamentary defeats on upcoming economic legislation.

The new fiscal plan is due to be announced on 23rd November and by then there will be a clearer view of how much appetite and willingness there is in both the markets and parliament for the government’s radical new approach.

Hopefully, after the publication of the Office for Budget Responsibility’s independent reports on the economy and the government’s economic policy, we could see some calming of the markets.

Want to recieve The Friday Update straight into your inbox?

Previous updates...

A positive week for Sterling

A positive week for Sterling

Following the drama of the last couple of weeks, the last five days have been relatively quiet on the economic front. There were no major economic releases coming out of the UK. Over the course of the week, we’ve seen the Pound slowly gain ground against both the Euro and

UK digests new economic policies announced in Autumn Statement

UK digests new economic policies announced in Autumn Statement

It has been a huge week for the UK economy. On Tuesday the rate of unemployment rose slightly from 3.5% to 3.6%. This was swiftly followed by higher-than-expected inflation figures on Wednesday. UK inflation is now sitting at a whopping 11.1%, a 41-year high. Yesterday we saw the Autumn Statement

UK braced for next week’s big Budget Statement

UK braced for next week’s big Budget Statement

It’s been a mixed week for the markets.  This morning saw the announcement of new GDP figures which showed the UK economy had contracted by 0.2% in the last quarter, pushing the UK ever closer to officially being in recession. It’s worth noting that the Bank of England already believes

1 2 3 13