The Bank of England kept policy on hold yesterday, and seem set to remain that way until the outcome of Brexit becomes clearer. However, it does appear the divergence of views on the committee is widening.
It is politics however, that continues to dominate the headlines as the conservative party leadership race plays out.
In the US, the central bank also kept rates on hold this week, though almost half of policymakers expect lower rates this year, on concerns about the growth and inflation outlook.
Whilst in Europe, central bank president Draghi said that should the economy continue to weaken, more stimulus is available, including cutting rates further.
On the exchanges, the dollar has weakened on the prospect of lower US rates, giving sterling some respite.
GBP/USD found a base just ahead of 1.2500 as expected, but we need a closing break above the pivotal 1.2750 level to alleviate the short-term negative sentiment.
GBP/EUR initially dropped to its lowest levels since January to around 1.1150 before rallying strongly. We need a break above the 1.1300 level to gain some further upside momentum.
|28/6/19||UK GDP YoY||1.8%||1.8%|
|28/6/19||UK Current Account Balance||-23.7b||-31.6b|
|Indices||Previous Close||YTD % Change|
|DFM GENERAL INDEX||2658||+5.06%|
UK Benchmark Rates
|3 month||0.78413%||2 year||0.86%|
|6 month||0.86988%||3 year||0.86%|
|12 month||0.98225%||5 year||0.90%|
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