If you’d like to know when to sell Euros, it may interest you to know that increased costs and difficult trading conditions have caused the UK economy to remain still during the second quarter, according to a new survey. The BCC (British Chamber of Commerce) confirmed that overseas orders hit their lowest point since 2015, while the number of manufacturers recording an increase in domestic orders was at its lowest level since 2012.
Manufacturing activity was also hit by the knock-on effect of the stockpiling that took place in Quarter 1, in advance of the original March 31st Brexit deadline, as firms instead opted to run down existing stock.
By comparison, in the services sector, the BCC survey showed a small increase in the number of companies reporting higher sales, both at home and overseas. The services sector accounts for around 80% of the UK economy, so this news was somewhat welcomed given the tough manufacturing climate.
In a separate report by the Confederation of British Industry (CBI), 26% of financial services firms confirmed that they’d increased their number of employees, compared to 13% who had reduced staff numbers. However, only a mere 2% of firms questioned said they felt more positive about the next quarter.
Is the Euro going up? Bercow intervenes against ‘No Deal’
Elsewhere, on the political front, the Speaker of the House of Commons, John Bercow, has blocked the amendment by Dominic Grieve and Dame Margaret Beckett, which was the latest attempt to block a no-deal Brexit.
The amendment proposed that funding to key public services, including the Department for Education and Department for Work and Pensions, be stopped if the UK exited the European Union with no deal in place. This is the second failed attempt of an amendment to stop ‘No Deal’ and I wouldn’t bet against further attempts.
Jeremy Hunt has now set out a 10 point plan as he sets a hard deadline of the 30th September. This is where, if it was obvious that a deal could not be negotiated, the country would prepare for a clean break. One can’t help but think this rhetoric is only to gain votes, as Boris Johnson leads the way in the race for number 10.
Unsurprisingly, the Pound has shown little reaction and the GBP/EUR interbank rate continues to trade close to a 6-month low, in the 1.11s. With Brexit uncertainty almost certain to continue, economic pressures are likely to keep the UK currency from making any significant gains.
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