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You can find the current article at its original source at https://www.theguardian.com/business/live/2016/oct/12/sterling-rebounds-brexit-fears-bank-of-england-business-live
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| Sterling rebounds as hard Brexit fears recede – business live | Sterling rebounds as hard Brexit fears recede – business live |
| (35 minutes later) | |
| 9.17am BST | |
| 09:17 | |
| Despite jumping by almost two cents this morning, the pound is still worth less than first thing yesterday morning. | |
| That’s because sterling was duffed up in the foreign exchange markets last night, plummeting through the $1.21 mark. | |
| The pound then soared back overnight, following reports that Theresa May would allow MPs more Brexit scrutiny. | |
| Mike Bird of the Wall Street Journal has the details: | |
| pic.twitter.com/hFA3eJFbkA | |
| Updated | |
| at 9.18am BST | |
| 9.07am BST | |
| 09:07 | |
| Despite today’s rally, the pound is still around 5% weaker than before the Conservative Party conference, where Theresa May promised to trigger article 50 within six months. | |
| The penny drops! #Fundamentals alone could push #sterling lower. Further #isolationist rhetoric can only hasten that https://t.co/x1USYuZ36B pic.twitter.com/QsQrf0e5rU | |
| The recent slide in sterling, and the alarming ‘flash crash’ last Friday, must have caused some concern in Downing Street (even though a weaker pound should help the economy rebalance). | |
| The Financial Times reports today that some senior Tories have admitted privately that the weak pound could create serious political headaches. | |
| Mrs May said last week that the fundamentals in the British economy were strong and that the economy had grown more strongly than many had expected after the June 23 Brexit vote. “We see sterling moving in different ways at different times,” she said. | |
| But some Tory MPs warn that “imported” inflation will erode living standards and undermine Mrs May’s attempts to help the “ordinary working-class” Britons who saw the Brexit vote as a cry for help. | |
| The rising cost of fuel, food and foreign holidays are already being felt by families described by Mrs May as those who are “just getting by”. Labour has called for pro-Brexit ministers to apologise. | |
| 8.59am BST | |
| 08:59 | |
| This chart, from Capital Economics, suggests the pound has been ‘oversold’ recently, compared to what you’d expect based on likely interest rate moves. | |
| #GBP/USD recently fallen below level implied by UK/US interest rate expectations. Rebound ahead if hard #Brexit worries ease? pic.twitter.com/GRgesArXPO | |
| 8.45am BST | 8.45am BST |
| 08:45 | 08:45 |
| Today’s sterling rally may not last, according to Neil Wilson, analyst at City firm ETX Capital. | Today’s sterling rally may not last, according to Neil Wilson, analyst at City firm ETX Capital. |
| He reckons the pound will suffer more volatility, as the political drama around Brexit continues to play out. | He reckons the pound will suffer more volatility, as the political drama around Brexit continues to play out. |
| Theresa May’s decision last night to allow the House of Commons a debate on the government’s Brexit plans before triggering Article 50 seems to have allayed some of the concerns about a ‘hard Brexit’ that had dominated since her speech at the Conservative Party conference. Bank of England policymakers had also appeared to talk the currency lower. | Theresa May’s decision last night to allow the House of Commons a debate on the government’s Brexit plans before triggering Article 50 seems to have allayed some of the concerns about a ‘hard Brexit’ that had dominated since her speech at the Conservative Party conference. Bank of England policymakers had also appeared to talk the currency lower. |
| But if traders think the mood is turning bullish for the pound, they’re mistaken. The bears are still very much in control and this relief rally looks like a dead cat bounce | But if traders think the mood is turning bullish for the pound, they’re mistaken. The bears are still very much in control and this relief rally looks like a dead cat bounce |
| 8.39am BST | 8.39am BST |
| 08:39 | 08:39 |
| London’s stock market has dipped in early trading, sending the FTSE 100 index down by 21 points (or -0.3%) to 7049. | London’s stock market has dipped in early trading, sending the FTSE 100 index down by 21 points (or -0.3%) to 7049. |
| That’s partly due to this morning’s sterling rally. A stronger pound isn’t great news for internationally-focused companies, who earn most of their earnings in foreign currencies. | That’s partly due to this morning’s sterling rally. A stronger pound isn’t great news for internationally-focused companies, who earn most of their earnings in foreign currencies. |
| Oh in other words: | Oh in other words: |
| I did a 'splainer pic.twitter.com/qsm8hPtu7X | I did a 'splainer pic.twitter.com/qsm8hPtu7X |
| 8.28am BST | 8.28am BST |
| 08:28 | 08:28 |
| The pound is also enjoying a good morning against the euro, up over 1% at €1.108. | The pound is also enjoying a good morning against the euro, up over 1% at €1.108. |
| So respite for sterling in early trading , Euro v £ down from 91.4 p to 90 p | So respite for sterling in early trading , Euro v £ down from 91.4 p to 90 p |
| Updated | Updated |
| at 8.42am BST | at 8.42am BST |
| 8.21am BST | 8.21am BST |
| 08:21 | 08:21 |
| Asa Bennett of the Daily Telegraph has a good explanation of how MPs are being allowed more scrutiny of the government’s Brexit plans. | Asa Bennett of the Daily Telegraph has a good explanation of how MPs are being allowed more scrutiny of the government’s Brexit plans. |
| This is from his morning email: | This is from his morning email: |
| The Government may not want to give a “running commentary” on its Brexit strategy, but MPs are very keen for Parliament to have its say. Some Tory MPs are among them, with Stephen Phillips warning ministers that they would be acting like a “tyranny” to negotiate Brexit without consulting Parliament. “That really is a democratic deficit,” writes Philip Johnston in today’s paper. “Actually, let’s not mince words. That’s dictatorship.” Brexit means Brexit, James Kirkup adds, “but Parliament is Parliament”. | The Government may not want to give a “running commentary” on its Brexit strategy, but MPs are very keen for Parliament to have its say. Some Tory MPs are among them, with Stephen Phillips warning ministers that they would be acting like a “tyranny” to negotiate Brexit without consulting Parliament. “That really is a democratic deficit,” writes Philip Johnston in today’s paper. “Actually, let’s not mince words. That’s dictatorship.” Brexit means Brexit, James Kirkup adds, “but Parliament is Parliament”. |
| Labour is hoping to exploit this concern by pushing an Opposition Day motion today calling for Parliament to be able to scrutinise the government’s Brexit plan before Article 50 is triggered, and offering 170 questions for ministers to answer. It looks like the Opposition has scored a direct hit, as the Government moved last night to table a surprise amendment offering MPs extra Parliamentary scrutiny of the Brexit process in order to prevent Tory MPs from rebelling, which Labour has trumpeted as “one hell of a climbdown”. | Labour is hoping to exploit this concern by pushing an Opposition Day motion today calling for Parliament to be able to scrutinise the government’s Brexit plan before Article 50 is triggered, and offering 170 questions for ministers to answer. It looks like the Opposition has scored a direct hit, as the Government moved last night to table a surprise amendment offering MPs extra Parliamentary scrutiny of the Brexit process in order to prevent Tory MPs from rebelling, which Labour has trumpeted as “one hell of a climbdown”. |
| Today's briefing - "Parliament means Parliament" is out now, and you can read it here: https://t.co/eb1U69CxFw pic.twitter.com/8KBSR67oNs | Today's briefing - "Parliament means Parliament" is out now, and you can read it here: https://t.co/eb1U69CxFw pic.twitter.com/8KBSR67oNs |
| Paul Donovan of Swiss bank UBS confirms that this ‘surprise amendment’ has help the pound to rally. | Paul Donovan of Swiss bank UBS confirms that this ‘surprise amendment’ has help the pound to rally. |
| He writes: | He writes: |
| The UK government indicated that Parliament may have a say on its negotiation stance ahead of the exit discussions with the EU. | The UK government indicated that Parliament may have a say on its negotiation stance ahead of the exit discussions with the EU. |
| The change in the nuance of the government’s position has halted the seemingly inexorable decline of sterling. Markets are once again the idle playthings of politicians’ whims. | The change in the nuance of the government’s position has halted the seemingly inexorable decline of sterling. Markets are once again the idle playthings of politicians’ whims. |
| Updated | Updated |
| at 8.24am BST | at 8.24am BST |
| 8.09am BST | 8.09am BST |
| 08:09 | 08:09 |
| Pound bounces back as May agrees to Brexit debate | Pound bounces back as May agrees to Brexit debate |
| The pound is rallying hard this morning, following signs that the government will allow MPs more scrutiny of its plans to leave the European Union. | The pound is rallying hard this morning, following signs that the government will allow MPs more scrutiny of its plans to leave the European Union. |
| Sterling has gained more than 1.5 cents this morning, popping back over the $1.23 mark as traders give the pound new vote of confidence. | Sterling has gained more than 1.5 cents this morning, popping back over the $1.23 mark as traders give the pound new vote of confidence. |
| Last night, it fell as low as $1.208, on fears that a ‘hard Brexit’ would hurt the UK economy. | Last night, it fell as low as $1.208, on fears that a ‘hard Brexit’ would hurt the UK economy. |
| So what’s changed? | So what’s changed? |
| Well, overnight, Theresa May’s government has accepted that MPs should be allowed a “full and transparent debate on the government’s plans to leave the EU”. | Well, overnight, Theresa May’s government has accepted that MPs should be allowed a “full and transparent debate on the government’s plans to leave the EU”. |
| This proposals comes from the opposition Labour party, which is demanding “proper scrutiny” of May’s plans in Parliament before Article 50 is triggered, in March 2017. | This proposals comes from the opposition Labour party, which is demanding “proper scrutiny” of May’s plans in Parliament before Article 50 is triggered, in March 2017. |
| Labour’s proposal will be debated in parliament today, and May has already signalled that she will allow such a debate | Labour’s proposal will be debated in parliament today, and May has already signalled that she will allow such a debate |
| But she’s also added an amendment, insisting that such scrutiny shouldn’t “undermine the negotiating position of the government”. Effectively she doesn’t want her hands tied during the Brexit negotiations by MPs back in London. | But she’s also added an amendment, insisting that such scrutiny shouldn’t “undermine the negotiating position of the government”. Effectively she doesn’t want her hands tied during the Brexit negotiations by MPs back in London. |
| She’s also NOT allowing MPs a formal vote on whether to trigger article 50. | She’s also NOT allowing MPs a formal vote on whether to trigger article 50. |
| But still....Labour MP Keir Starmer says this is a victory for MPs who have been demanding proper parliamentary scrutiny of the government’s plans for Brexit. | But still....Labour MP Keir Starmer says this is a victory for MPs who have been demanding proper parliamentary scrutiny of the government’s plans for Brexit. |
| Govt accepts Labours demand for proper scrutiny of Brexit plans. Welcome victory ahead of Commons debate tomorrow: democratic grip essential https://t.co/XwM4g4x6wx | Govt accepts Labours demand for proper scrutiny of Brexit plans. Welcome victory ahead of Commons debate tomorrow: democratic grip essential https://t.co/XwM4g4x6wx |
| This real victory for Parliament will help ensure there is proper democratic grip of Brexit process - @Keir_Starmer https://t.co/IjIsOPqY2I | This real victory for Parliament will help ensure there is proper democratic grip of Brexit process - @Keir_Starmer https://t.co/IjIsOPqY2I |
| The prospect of MPs giving the Brexit plan more scrutiny has reassured investors, as it could limit the prospects of a damaging ‘hard Brexit’ which would see the UK banished from the single market. | The prospect of MPs giving the Brexit plan more scrutiny has reassured investors, as it could limit the prospects of a damaging ‘hard Brexit’ which would see the UK banished from the single market. |
| Kathleen Brooks of City Index says it’s quite a turnaround for the pound, after four days of chunky losses: | Kathleen Brooks of City Index says it’s quite a turnaround for the pound, after four days of chunky losses: |
| What a difference a day makes, the pound is the top performer in the G10 on Wednesday, rising by more than 1.3% versus the euro, and 1% versus the US dollar. The trigger was a surprise announcement from Prime Minister Theresa May that she will allow Parliament to vote on her plan to take the EU out of the European Union. | What a difference a day makes, the pound is the top performer in the G10 on Wednesday, rising by more than 1.3% versus the euro, and 1% versus the US dollar. The trigger was a surprise announcement from Prime Minister Theresa May that she will allow Parliament to vote on her plan to take the EU out of the European Union. |
| This will allow the UK’s elected representatives to scrutinize Theresa May’s plans for Brexit. It has triggered a relief rally in the pound on Wednesday, as it could potentially limit the prospect of a “hard Brexit” taking the UK out of the single market, which has been a major concern for some investors and the business community in recent days. | This will allow the UK’s elected representatives to scrutinize Theresa May’s plans for Brexit. It has triggered a relief rally in the pound on Wednesday, as it could potentially limit the prospect of a “hard Brexit” taking the UK out of the single market, which has been a major concern for some investors and the business community in recent days. |
| Pop in the pound...on May's agreement Parliament should be allowed vote on Brexit plan (tho' can't block Brexit or "undermine" negotiation) pic.twitter.com/VNKfhx0AaD | Pop in the pound...on May's agreement Parliament should be allowed vote on Brexit plan (tho' can't block Brexit or "undermine" negotiation) pic.twitter.com/VNKfhx0AaD |
| Updated | Updated |
| at 8.17am BST | at 8.17am BST |
| 7.45am BST | 7.45am BST |
| 07:45 | 07:45 |
| Introduction | Introduction |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| We’ll be watching the pound closely again, after last night’s heavy losses sent sterling down below the $1.21 mark last night. | We’ll be watching the pound closely again, after last night’s heavy losses sent sterling down below the $1.21 mark last night. |
| Overnight, a government advisor has warned that leaving the EU customs union would have a significant negative impact on the UK economy, in the long term. | Overnight, a government advisor has warned that leaving the EU customs union would have a significant negative impact on the UK economy, in the long term. |
| That’s added to concerns that Britain’s financial sector will suffer badly from Brexit, if banks start to shift jobs out of the City. | That’s added to concerns that Britain’s financial sector will suffer badly from Brexit, if banks start to shift jobs out of the City. |
| Bank of England deputy governor Sir Jon Cunliffe should give his views this morning; he’s testifying to the House of Lords from 10am on Brexit’s impact on the UK financial services business. | Bank of England deputy governor Sir Jon Cunliffe should give his views this morning; he’s testifying to the House of Lords from 10am on Brexit’s impact on the UK financial services business. |
| And airline group Monarch is just announcing a new £165m funding deal that should keep it running. More on that shortly.... | And airline group Monarch is just announcing a new £165m funding deal that should keep it running. More on that shortly.... |
| Updated | Updated |
| at 7.46am BST | at 7.46am BST |