First Major Test for Conservative Government.

MPs will today vote on Boris Johnston’s plan to leave the EU on January 31st in what will be the first test of the new majority Conservative government.

The EU (Withdrawal Agreement) Bill has the amendment banning the extension of the transition period past 2020. As some expect the negotiations with the EU to run into many years the downward pressure on sterling relating to a “no deal” scenario has continued.

It is expected that the new Governor of the Bank of England could be announced as early as this morning. Andrew Bailey, the chief executive of the Financial Conduct Authority, has emerged as the most likely candidate to replace Mark Carney. The appointment of Bailey would see him surpass earlier favourites including London School of Economics director Dame Minouche Shafik.

The BoE opted yesterday to keep interest rates unchanged at 0.75% as it warned that there was little chance of significant economic growth in the next quarter. The Bank’s Monetary Policy Committee voted 7-2 in favour of maintaining the rate, as it did it the previous meeting in November.

UK Gross Domestic Product for Q3 is released today and if the number comes out lower than expected the pound could come under a lot of pressure that would round off a very poor week for the currency.

Economic Calendar

09:30GBP Public Sector Net Borrowing (Nov)£5.6 B£10.509 B
09:30GBP Gross Domestic Product (YoY) (Q3)1%1%
09:30GBP Gross Domestic Product (QoQ)(Q3)0.30%0.30%
11:00GBP BoE's Haskel speechSpeech-
13:30USD Gross Domestic Product Annualized (Q3)2.10%2.10%
13:30USD Core Personal Consumption Expenditures (QoQ) (Q3)2.10%2.10%
13:30USD Gross Domestic Product Price Index (Q3)1.80%1.70%
13:30USD Personal Consumption Expenditures Prices (QoQ) (Q3)1.50%1.50%
13:30CAD Retail Sales (MoM) (Oct)0.50%-0.10%
13:30CAD Retail Sales ex Autos (MoM) (Oct)0.30%0.20%
15:00USD Core Personal Consumption Expenditure - Price Index (MoM) (Nov)0.10%0.10%
15:00USD Michigan Consumer Sentiment Index (Dec)99.299.2
15:00USD Personal Income (MoM) (Nov)0.30%0%
15:00USD Personal Spending (Nov)0.40%0.30%
15:00USD Core Personal Consumption Expenditure - Price Index (YoY) (Nov)1.60%1.60%

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.