- Consumer Price and Producer price index down on expectations but still positive
- Brexit discussions to be concealed from public eye
Sterling falls on latest releases
The UK’s economy has been a subject to much scrutiny following the Brexit vote. Much of these concerns were put to bed following a sting of positive data from July. Nevertheless, the UK remains vulnerable in this post-Brexit limbo, whilst investors try to gauge the likelihood of a recession.
Sterling lost some ground this morning, consumer price and producer figures stood strong, and although the data did not meet expectations it certainly counters the post-Brexit doom and gloom that many projected prior to the results.
However, consumer price and its connection with inflation is not always straight forward. The UK has suffered from a cheaper Pound and costs from importing products in most cases will be passed on to the consumers. An important release tomorrow could provide better understanding between these parallels, average earnings.
With the release tomorrow of average earnings, if we see strong data this could explain why the price of goods has gone up (in line with inflation), however a negative reading could equate to lower wages and more expensive goods. Which could negatively impact spending in the months ahead.
Theresa May to keep public in the dark about Brexit talks
It was revealed this morning that Theresa May will conceal much of the Brexit negotiations from the public eye. Theresa May told parliament ‘We will not take decisions until we are ready. We will not reveal our hand prematurely. And we will not provide a running commentary.’
The development of the UK’s strategy post-Brexit will be very important to investors and to be kept in the dark could spell bad news for the UK, or could it be positive?
One of the concerns raised by myself upon hearing of the Brexit vote focused around Sterling exchange rates and news of the UK’s withdrawal. If Theresa May keeps much of the discussions away from the public eye, this could limit the impact to Sterling’s value.
Their does remain questions as to what the public will be made aware of, with a hard Brexit or soft Brexit still likely to be a huge driver behind exchange rate fluctuations.
In the mean time, the Pound remains range bound by its post-Brexit averages. It’s looking less likely that further advancements will happen whilst the UK remains in limbo.