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Sterling suffered a disappointment when January’s consumer price index failed to show as strong an uptick in inflationary pressure as forecast. This undermined investors’ hopes that the Bank of England (BoE) could be prompted to tighten monetary policy sooner rather than later, leaving the Pound with little in the way of support. Brexit-based jitters could [...]

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The first Bank of England (BoE) policy meeting of 2017 did not offer much encouragement for the Pound, even though policymakers raised their growth forecasts for the coming year. Markets were not particularly impressed to find that the Monetary Policy Committee (MPC) had continued to vote unanimously in favour of maintaining its current level of [...]

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As the government’s Article 50 bill entered Parliament, sentiment towards the Pound saw some sharp moves, with investors jittery that the bill could pass without any significant amendments. Even so, the increased clarity over Theresa May’s timetable for starting formal exit proceedings offered encouragement to Sterling, particularly given the promise of a white paper on [...]

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Supreme Court Ruling Triggered Pound Volatility

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Date: January 25th, 2017.

The much anticipated Supreme Court ruling on the Article 50 case ultimately prompted Sterling to weaken, in spite of the verdict upholding the judgement that an Act of Parliament is required to begin formal exit proceedings from the EU. This less favourable market reaction was prompted by concerns that a second Scottish independence referendum could [...]

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Pound exchange rates slumped sharply at the start of the week after reports emerged that the government was not looking to maintain membership of the single market in negotiations with the EU. However, this downtrend was soon reversed when Theresa May set out her broad aims for Brexit in her first major speech on the [...]

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Hard Brexit Fears Weigh on Pound Rates

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Date: January 11th, 2017.

Comments from Theresa May saw the Pound plunge dramatically at the start of the week, with suffering from a resurgence in market fears of a hard Brexit. May’s statement that the government is not interested in keeping ‘bits’ of its EU membership led to speculation that privileged access to the single market is likely to [...]

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Both the UK Manufacturing and Construction PMIs for December markedly bettered forecasts, offering further evidence that the initial negative impact of the Brexit vote has faded. These latest signs of strength within the economy offered support to the Pound, although this positive data was not enough to entirely overshadow the latest political turmoil. Nevertheless, hopes [...]

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Limited Trade Volumes Encourage Pound Volatility

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Date: December 21st, 2016.

Unsurprisingly the Bank of England (BoE) opted to leave interest rates on hold at its final meeting of the year, offering little in the way of support for Sterling. The Monetary Policy Committee (MPC) unexpectedly lowered its inflation forecasts for 2017, noting that the Pound has recovered significantly from its post-referendum lows. While this might [...]

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Reaction to the Supreme Court hearing of the government’s Article 50 appeal has been relatively limited given that the verdict will not be known for some time yet. Even so, Brexit-based speculation helped to drive the Pound higher thanks to ongoing speculation that the UK could pay to maintain its privileged access to the single [...]

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A page of leaked government notes on Brexit failed to do much to weigh down the Pound, despite these appearing to point towards the UK losing its access to the single market. Investors were more inclined to focus on positive consumer credit and mortgage approvals figures, which together suggested that the domestic economy remains robust [...]

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