The Pound continues to defy the Brexit woes predicted last year, following the latest public net borrowings which saw a surplus of over £9bn – levels not witnessed in over 17 years. A weaker Pound may have its concerns with inflation set to rise sharply, but British exporters have cushioned the overall impact of the Brexit vote.
The news will be welcomed by the Chancellor Philip Hammond who is due to give his budget announcement in two weeks time, and will allow investors to view the UK economy from a position of strength.
Sterling is up against all major currencies except the US Dollar, which continues to strengthen as markets anticipate another rate hike to follow in March.
Brexit bill to pass the House Of Lords
The debate reaches its second day in the House of Lords and members have been advised not to delay or block attempts to invoke Article 50 in March.
Lord O’Neill, a former trade Minister has made a request for the UK to maintain close relationships with the EU, holding on to single market access as a matter of priority. The UK must be doing more to boost trade links, he added, claiming not enough thought has been given to the economic consequences of the vote.
There may be some amendments to the bill but these are unlikely to tamper with Theresa May’s deadline in March.
UK exit bill to exceed €60bn
The European Commissioner Jean Claude Juncker has added further salt to the Brexit wound by insisting the UK must pay to leave the bloc.
The bill is expected to reach €60bn, which is made up of projects the UK committed to before the Referendum in June.
Negotiations are likely to focus around the exit bill and could make for difficult talks in the weeks ahead.
Bank of England more bullish on the UK economy
The Pound has found further support today following words from the Bank of England’s Chief Mark Carney, who has stated the UK may avoid pitfalls from the Brexit vote.
His words have contradicted his previous forecasts, but given the UK’s resilience since June growth forecasts have been upgraded as a result.
The announcement was seen as positive for Sterling investors, with the prospect of a rate hike on the cards if inflation exceeds the Bank of England’s target.
It may be wise to exercise caution, with the Government expected to invoke article 50 in the coming weeks appetite for the Pound may diminish.