Fresh fears have emerged from the weekend regarding Theresa May’s position as Prime Minister. This morning it was revealed that the Prime Minister will reach out to Labour to help her create policies for a post-Brexit Britain amidst fears that her own Conservative party will try and get rid of her.
Tomorrow marks an important day for the Prime Minister, it was exactly a year ago that she entered No.10. Ahead of an important speech tomorrow, Theresa May couldn’t look more vulnerable, and in my opinion she should deliver a speech tomorrow that tries to install a sense of belief in her. Over the weekend, Brexit Secretary David Davis appears to have stepped up as a front-runner to replace Theresa May following rumours that his allies are trying to get rid of her. Andrew Mitchell, a former chief whip commented a dinner of Conservative MP’s that she needed to be replaced.
After a slew of economic data last week, releases are fairly thin for the UK this week. However, Wednesday’s labour market update could attract a lot of interest from investors. A large question mark could loom over the Bank of England (BoE) if the labour report lives up to expectations – a further fall in unemployment and a dip in wage growth for the first 3 months of the year.
This could be the day to move Sterling tied currencies, as recent labour market reports have caused speculation and divides over further interest rates. If the report does signal a stronger workforce with less wage growth and growing inflation, I wouldn’t be surprised to see hawkish comments from the BoE and therefore some Pound Sterling strength after Wednesday, depending on sentiment.