UK PM May’s vulnerability was emphasised again this week as last minute agreements and compromises had to be made in order to avoid any humiliating defeats as Brexit Bill amendments were debated and voted on, points out Tim Riddell, Research Analyst at Westpac.
Key Quotes
“Although the Bill progressed and a market friendly “softening” of Brexit is the likely end result, it will be increasingly tense within May’s Cabinet as key aspects of the Irish border and customs are negotiated with EU.”
“The main negotiations on market access and trade relations have now been delayed until at least the UK White Paper on Brexit is published (after the late June EU summit). In the interim, UK data sags and businesses are holding off from investment.”
“The recent pullbacks in inflation are allowing for only minor lifts in real earnings growth. Brexit uncertainty, weak household finances and a beleaguered retail sector suggest that the BoE is unlikely to move next week.”
“Any soft Brexit related GBP/USD rebounds should struggle above 1.3500 as an effective 1.28-1.37 range develops.”
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