Once, Twice, Three Times Theresa

5 April, 2019

Samuel Roberts

The Governor of The Bank of England Mark Carney’s words still ring in the ears of many British Citizens and colleagues in the Financial Industry. ‘The risk of Britain stumbling into a “disorderly” no-deal Brexit is now “alarmingly high’.

We all know how we got here, through a blend of indecision, hidden agendas and plain, weak negotiating skills but ours is not to criticize the government (who ever they will be by the end of the month) but to try and make sense of an already uncertain currency market place, with all of its’ movements and  contributing factors.

For the last five (5) weeks, Sterling has been moving between 1-2% and whichever way it has been moving, it is still stronger than it has been in over two (2) years.

A ‘no deal’ Brexit is said to be bad but why? Due to the fact that all the financial markets like familiarity, certainty and stability.  During the last eighteen (18) months of  our ‘Brexit negotiations’ Britain has pledged or already invested almost ten billiion pounds in overseas investments or FDI’s (Foreign Direct Investments).  All good but the problem with this, is in the same time Britain has lost over one Trillion (yes the one with twelve zeros) in investment and commitments from our once global partners.  A ‘No deal’ means that we would have to start to ‘re-establish’ friendships and deal terms all over again and not from a position of any strength.

Yes it can be said that in the past, an investment in Britain would yield an organization a handsome return but currently we have not been the country of decision and strength.

House prices are still up 0.8% over last year but they are down from last month and have steadily been falling for the last five months.

By the end of the first quarter, the UK economy was (officially) between 1 and 1.5% smaller than it would have been without the Brexit vote, although other European independent estimates, such as a recent report from the Centre for European Reform, suggest that the deficit could have been as large as 2.5%.

Add the fact that the UK is currently  languishing near the bottom of the G7 league table for annual growth, just above Italy and you can see that things are not exactly looking ‘rosey’ for our immediate future.

Not all bad though because there are several financial instruments that we can offer at Currency Index, to mitigate or limit the amount of exposure that our clients face while having to make a trade at these difficult times.

Economic Data Releases for Friday 5th April

Labour productivity Quarter on Quarter figure

This is a measure of productivity measured by house hold.  This includes output per hour as measured against our previous quarter rated against some of our main European counterparts.   Not a main stay of economic stability but more of an eye to see if we are working as hard as we need to.

Halifax Price Index

This is an indicator of peoples’ ability and willingness to buy property throughout the UK.  January this year hit the national average but if you consider that we have been way above the national average for a number of years and overseas buyers have started to slow, although the numbers will be good (because we are still higher than an couple of years ago) it is an underlying indicator of overseas commitment to purchasing in the UK.

Did you know that the currency market can fluctuate as often as every 0.5 seconds and that as an account holder with Currency Index, you can call in and get a live quote, as many times as you like? Why not open an account today, it takes all of two minutes (max) and opens up services and mechanisms that can guide you through these difficult times.


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