Last week was definitely a strange one- with many resignations from Boris Johnson’s cabinet including Chancellor Rishi Sunak and many other high-profile names. Within 24 hours Boris Johnson tendered his resignation as it is evident there is no confidence in him from the Conservative party- and the markets seemed to agree with Sterling rates rising by over 1% on the news and the FTSE also having a pretty good week.
This is strange, as actually, the UK has now hit a lot of uncertainty- we have various problems such as inflation, wages and the economy and we now technically have no leader or working Government that can act- it also means that the Bank of England will have to think twice before another rate hike in August- with 50bps currently on the cards, they may feel it is wiser to wait until a new PM has been installed.
We have now seen many Tory MP’s throw their hats into the ring, with the current favorite being Rishi Sunak- I am sure we will see the “favorite” change regularly until the actual vote occurs, but it does seem that the markets like Sunak- either way, whenever the leadership battle is done, it is almost certain that a General Election will have to be called, which will no doubt cause some instability for the UK- but we will cross that bridge when we get to it, just something we need to be aware of for now.
This week should hopefully be less eventful, while we have the leadership race in the background, we still have to consider key data releases which I have listed below- if you have a currency transfer that you would like some assistance with timing then please don’t hesitate to contact me.
Tuesday- European ZEW Economic sentiment index
Tuesday- BoE Governor Bailey Speech
Wednesday- UK GDP, Trade Balance, Industrial & Manufacturing Production
Wednesday- U.S Inflation
Wednesday- Canada interest rate decision (Hike to 2.25% expected)
Friday- U.S Retail Sales