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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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| Pound falls back as Davis says government cannot outline Brexit aims in detail – Business live | Pound falls back as Davis says government cannot outline Brexit aims in detail – Business live |
| (35 minutes later) | |
| 5.17pm BST | |
| 17:17 | |
| European markets close lower | |
| Ahead of the minutes from the latest US Federal Reserve meeting, and as the pound recovers slightly but remains close to its record lows, European markets have ended the day lower. Chris Beauchamp, chief market analyst at IG, said: | |
| A small recovery in US markets at the beginning of the session is already beginning to fizzle out, while the US dollar is doing well ahead of Fed minutes, on the expectation that the account of the most recent meeting will show a committee still keen to raise rates. As has been the case for the week thus far, attention has focused mainly on sterling, thanks to the absence of heavy-hitting UK data. The pound continues to lose ground, testing the water below $1.22 again, although indications that the UK government may have to navigate Parliament before activating Article 50 have helped to stem downside in cable today. | |
| In a quiet session the main event, Fed minutes, is still to come, and could yet reverse the weakness in equities and the relatively sparky performance of the dollar. Of particular note this afternoon is a possible breakout in dollar/yen which is finally trying to move meaningfully above Y104. 2016 has been, by and large, a year of yen strength, but it will be music to Shinzo Abe’s ears if the Japanese currency finally begins to fall. After all, if the UK can do it, why not Japan? | |
| On the European markets, the final scores showed: | |
| On Wall Street, the Dow Jones Industrial Average is currently up 31 points or l0.18%. | |
| 4.33pm BST | 4.33pm BST |
| 16:33 | 16:33 |
| Here’s our story on the debate in parliament, with MPs warning the government that the current uncertainty is hitting businesses and markets. Rowena Mason reports: | Here’s our story on the debate in parliament, with MPs warning the government that the current uncertainty is hitting businesses and markets. Rowena Mason reports: |
| A string of Tory and Labour MPs have warned David Davis, the Brexit secretary, that businesses and financial markets are being spooked by his lack of a plan for leaving the EU. | A string of Tory and Labour MPs have warned David Davis, the Brexit secretary, that businesses and financial markets are being spooked by his lack of a plan for leaving the EU. |
| Claire Perry, a Conservative former minister, said on Wednesday she was extremely concerned about the state of the pound and accused him of putting “narrow ideology” ahead of the national interest, while Ken Clarke, the former chancellor, said no foreign companies would invest until there was more clarity about the UK’s future relationship with the outside world. | Claire Perry, a Conservative former minister, said on Wednesday she was extremely concerned about the state of the pound and accused him of putting “narrow ideology” ahead of the national interest, while Ken Clarke, the former chancellor, said no foreign companies would invest until there was more clarity about the UK’s future relationship with the outside world. |
| Chris Philp, a Tory backbencher, urged the Brexit secretary to give away more details, saying there was a “danger some [businesses] may take decisions in the next two or three months” to pre-emptively scale back investment and move jobs. | Chris Philp, a Tory backbencher, urged the Brexit secretary to give away more details, saying there was a “danger some [businesses] may take decisions in the next two or three months” to pre-emptively scale back investment and move jobs. |
| Others to raise concerns included the serial rebel Anna Soubry, a former business minister who attended cabinet, who demanded a yes or no answer as to whether the UK would be in the single market. | Others to raise concerns included the serial rebel Anna Soubry, a former business minister who attended cabinet, who demanded a yes or no answer as to whether the UK would be in the single market. |
| The Brexit secretary said it was “not black or white” whether the UK would stay in the single market and parliament could not expect to be given every detail of the government’s plans for leaving. | The Brexit secretary said it was “not black or white” whether the UK would stay in the single market and parliament could not expect to be given every detail of the government’s plans for leaving. |
| Davis said the government had a mandate to get the best possible deal but insisted he could go no further than talking about overarching aims because revealing the UK’s top priority would prove “extremely expensive”. | Davis said the government had a mandate to get the best possible deal but insisted he could go no further than talking about overarching aims because revealing the UK’s top priority would prove “extremely expensive”. |
| The full story is here: | The full story is here: |
| 4.30pm BST | 4.30pm BST |
| 16:30 | 16:30 |
| The pound is back below $1.22 as the lift from the government’s promise of a Brexit debate fades, and the US currency strengthens on the growing expectation of a rate rise from the Federal Reserve before the end of the year. | The pound is back below $1.22 as the lift from the government’s promise of a Brexit debate fades, and the US currency strengthens on the growing expectation of a rate rise from the Federal Reserve before the end of the year. |
| Sterling is currently at $1.2193, up 0.6% on the day having earlier climbed as high as $1.2325. Against the euro the pound is up 1% at €1.1075. | Sterling is currently at $1.2193, up 0.6% on the day having earlier climbed as high as $1.2325. Against the euro the pound is up 1% at €1.1075. |
| 4.00pm BST | 4.00pm BST |
| 16:00 | 16:00 |
| A Treasury official has sought to ease fears about the City’s future in a post-Brexit world. Reuters reports: | A Treasury official has sought to ease fears about the City’s future in a post-Brexit world. Reuters reports: |
| Britain’s financial services sector will be a “high priority” for the government when it negotiates the terms of Britain’s new relationship with the European Union, the most senior official in the country’s finance ministry said. | Britain’s financial services sector will be a “high priority” for the government when it negotiates the terms of Britain’s new relationship with the European Union, the most senior official in the country’s finance ministry said. |
| “The UK economy and UK exports are quite services-heavy, and financial services are an important part of that. So I think we will be very keen indeed to make sure the final agreement gives the proper place to financial services within that,” Tom Scholar, permanent secretary at the Treasury said. | “The UK economy and UK exports are quite services-heavy, and financial services are an important part of that. So I think we will be very keen indeed to make sure the final agreement gives the proper place to financial services within that,” Tom Scholar, permanent secretary at the Treasury said. |
| “So it will have a high priority in our discussions,” he said in a hearing before the lower house of parliament’s Treasury Committee on Wednesday. | “So it will have a high priority in our discussions,” he said in a hearing before the lower house of parliament’s Treasury Committee on Wednesday. |
| Top bankers warned on Tuesday they could start moving staff abroad as early as next year if there is no clarity on Britain’s access to the European single market once it leaves the EU. | Top bankers warned on Tuesday they could start moving staff abroad as early as next year if there is no clarity on Britain’s access to the European single market once it leaves the EU. |
| 3.29pm BST | 3.29pm BST |
| 15:29 | 15:29 |
| On the pound’s moves today, Connor Campbell at Spreadex said: | On the pound’s moves today, Connor Campbell at Spreadex said: |
| Though not as perky as at lunch time the pound has nevertheless held onto its earlier gains this afternoon. | Though not as perky as at lunch time the pound has nevertheless held onto its earlier gains this afternoon. |
| In the face of US investors keen to buy the dollar as Donald Trump’s presidential campaign disintegrates, and a speech from Brexit minister David Davis that erred on the ‘hard’ side of things, the pound managed to rise 0.7% against the greenback and 0.8% against the euro this Wednesday. A slight comedown from its morning highs, then, but nevertheless the kind of respite sterling was crying out for by the end of yesterday’s trading. | In the face of US investors keen to buy the dollar as Donald Trump’s presidential campaign disintegrates, and a speech from Brexit minister David Davis that erred on the ‘hard’ side of things, the pound managed to rise 0.7% against the greenback and 0.8% against the euro this Wednesday. A slight comedown from its morning highs, then, but nevertheless the kind of respite sterling was crying out for by the end of yesterday’s trading. |
| 3.27pm BST | 3.27pm BST |
| 15:27 | 15:27 |
| Of course Brexit is not the only thing influencing currencies at the moment, the dollar in particular. The greenback is strengthening on the prospect of a possible US interest rate rise this year, with Hillary Clinton’s lead in the US presidential race deemed to be something which could allow the Fed to move. | Of course Brexit is not the only thing influencing currencies at the moment, the dollar in particular. The greenback is strengthening on the prospect of a possible US interest rate rise this year, with Hillary Clinton’s lead in the US presidential race deemed to be something which could allow the Fed to move. |
| The minutes from the last Federal Reserve meeting, which left rates unchanged, will therefore be scrutinised for clues as to what the Fed members are thinking. Michael Hewson, chief market analyst at CMC Markets UK, said: | The minutes from the last Federal Reserve meeting, which left rates unchanged, will therefore be scrutinised for clues as to what the Fed members are thinking. Michael Hewson, chief market analyst at CMC Markets UK, said: |
| The US dollar has continued to be the primary beneficiary of this uncertainty hitting its highest levels since March, as markets look to the potential for a rate rise in December ahead of the publication later today of the latest FOMC minutes, where we will get further insight into the level of the dissent about last month’s decision to hold rates steady. | The US dollar has continued to be the primary beneficiary of this uncertainty hitting its highest levels since March, as markets look to the potential for a rate rise in December ahead of the publication later today of the latest FOMC minutes, where we will get further insight into the level of the dissent about last month’s decision to hold rates steady. |
| We know the doves were able to win the argument this time, however we don’t know how wide the divisions were and whether any other members felt compelled to go with the dissenters, but harboured enough doubts to hold back and wait a little bit longer. If the minutes point to any waverers on the dove front then the US dollar could well take another leg higher. | We know the doves were able to win the argument this time, however we don’t know how wide the divisions were and whether any other members felt compelled to go with the dissenters, but harboured enough doubts to hold back and wait a little bit longer. If the minutes point to any waverers on the dove front then the US dollar could well take another leg higher. |
| 2.59pm BST | 2.59pm BST |
| 14:59 | 14:59 |
| Some choice words from ex-chancellor Kenneth Clarke: | Some choice words from ex-chancellor Kenneth Clarke: |
| Clarke: "the reaction in the markets is only too obvious. Pound has devalued to an extent that would have been regarded a crisis in my time" | Clarke: "the reaction in the markets is only too obvious. Pound has devalued to an extent that would have been regarded a crisis in my time" |
| 2.51pm BST | 2.51pm BST |
| 14:51 | 14:51 |
| Time for some charts. | Time for some charts. |
| This one shows how the pound has suffered a volatile few days – starting with Friday’s flash crash, and continuing with last night’s rout. | This one shows how the pound has suffered a volatile few days – starting with Friday’s flash crash, and continuing with last night’s rout. |
| And this one, from fastFT, shows how the pound hit an all-time low against a basket of currencies last night (the data only goes back to mid-1880s). | And this one, from fastFT, shows how the pound hit an all-time low against a basket of currencies last night (the data only goes back to mid-1880s). |
| The FT’s Mehreen Khan says: | The FT’s Mehreen Khan says: |
| According to a trade-weighted index measuring sterling against a basket of its trading peers, the pound has now slumped to its lowest on record, stretching beyond the introduction of free-floating exchange rates in the 1970s, back to the mid-1800s according to data compiled by the Bank of England. | According to a trade-weighted index measuring sterling against a basket of its trading peers, the pound has now slumped to its lowest on record, stretching beyond the introduction of free-floating exchange rates in the 1970s, back to the mid-1800s according to data compiled by the Bank of England. |
| The pound’s effective exchange rate, which is weighted to reflect the UK’s trade flows, hit a low of 73.38 on Tuesday – weaker than the depths hit during the financial crisis, Britain’s ejection from the European Rate Mechanism in 1992, and its decision to leave the Gold Standard in the 1930s. | The pound’s effective exchange rate, which is weighted to reflect the UK’s trade flows, hit a low of 73.38 on Tuesday – weaker than the depths hit during the financial crisis, Britain’s ejection from the European Rate Mechanism in 1992, and its decision to leave the Gold Standard in the 1930s. |
| 2.37pm BST | 2.37pm BST |
| 14:37 | 14:37 |
| Brexit Minister David Davis talks and pound falls, again. Sterling now below $1.22 v USD | Brexit Minister David Davis talks and pound falls, again. Sterling now below $1.22 v USD |
| 2.33pm BST | 2.33pm BST |
| 14:33 | 14:33 |
| Pound falls back as government outlines Brexit strategy | Pound falls back as government outlines Brexit strategy |
| The pound lurched back below $1.22 as the government outlined its Brexit strategy -- although David Davis didn’t shed much new light on the situation. | The pound lurched back below $1.22 as the government outlined its Brexit strategy -- although David Davis didn’t shed much new light on the situation. |
| Secretary of state Davis promised to get the best possible terms for the UK as it leaves the EU, but refused to say whether, for example, it had ruled out retaining membership of the single market. | Secretary of state Davis promised to get the best possible terms for the UK as it leaves the EU, but refused to say whether, for example, it had ruled out retaining membership of the single market. |
| Anna Soubry asks whether UK has ruled out single market membership, yes or no? Davis says it's an eg of problem w/ language in the EU debate | Anna Soubry asks whether UK has ruled out single market membership, yes or no? Davis says it's an eg of problem w/ language in the EU debate |
| Instead, Davis said he could only outline the government’s “overarching aims”, saying: | Instead, Davis said he could only outline the government’s “overarching aims”, saying: |
| “We have been pretty clear on the overarching aims. Not the detailed aims. We’re not even at the point that that’s possible. | “We have been pretty clear on the overarching aims. Not the detailed aims. We’re not even at the point that that’s possible. |
| Davis insists this is sensible, as the government isn’t planning to trigger article 50 for several months. But this lack of detail could disappoint the financial markets as they try to get a grip on Brexit. | Davis insists this is sensible, as the government isn’t planning to trigger article 50 for several months. But this lack of detail could disappoint the financial markets as they try to get a grip on Brexit. |
| So, the pound is now only up 0.6% against the US today, meaning it’s close to the all-time record low hit yesterday. | So, the pound is now only up 0.6% against the US today, meaning it’s close to the all-time record low hit yesterday. |
| Remember, the deputy governor of the Bank of England has already warned today that markets don’t cope well with political uncertainty.... | Remember, the deputy governor of the Bank of England has already warned today that markets don’t cope well with political uncertainty.... |
| Christopher Vecchio of DailyFX.com reckons that investors are fretting about Brexit again, after a brief respite this morning... | Christopher Vecchio of DailyFX.com reckons that investors are fretting about Brexit again, after a brief respite this morning... |
| UK 10Y Gilts are selling off in conjunction with $GBPUSD turning lower...'Hard Brexit' fears are returning after overnight respite. | UK 10Y Gilts are selling off in conjunction with $GBPUSD turning lower...'Hard Brexit' fears are returning after overnight respite. |
| Seems that UK PM May's decision for parliamentary inclusion is for show only; 'Hard Brexit' still the most likely outcome. | Seems that UK PM May's decision for parliamentary inclusion is for show only; 'Hard Brexit' still the most likely outcome. |
| 2.17pm BST | 2.17pm BST |
| 14:17 | 14:17 |
| British government debt is also dropping in value, hitting its weakest level since the end of Jube. | British government debt is also dropping in value, hitting its weakest level since the end of Jube. |
| The yield (or interest rate) on 10-year gilts has risen to 1.06%, from 0.98% last night. | The yield (or interest rate) on 10-year gilts has risen to 1.06%, from 0.98% last night. |
| Yields rise when prices fall, so this means investors are selling gilts, pushing up the cost of servicing Britain’s national debt and financing the deficit. | Yields rise when prices fall, so this means investors are selling gilts, pushing up the cost of servicing Britain’s national debt and financing the deficit. |
| 1.58pm BST | 1.58pm BST |
| 13:58 | 13:58 |
| Another day, another bout of sterling volatility.... | Another day, another bout of sterling volatility.... |
| STERLING FALLS BACK BELOW $1.2200 AS U.S. INVESTORS SELL POUND, NOW UP JUST 0.6 PCT ON DAY | STERLING FALLS BACK BELOW $1.2200 AS U.S. INVESTORS SELL POUND, NOW UP JUST 0.6 PCT ON DAY |
| 1.54pm BST | 1.54pm BST |
| 13:54 | 13:54 |
| (•_•)<) )╯Here / \\(•_•) ( (> we go / \ (•_•)<) )> again / \£/$1.22 | (•_•)<) )╯Here / \\(•_•) ( (> we go / \ (•_•)<) )> again / \£/$1.22 |
| 1.52pm BST | 1.52pm BST |
| 13:52 | 13:52 |
| Eek, the pound is now shedding some of its earlier surge. It’s now up just one cent, at $1.22, having hit $1.23 earlier. | Eek, the pound is now shedding some of its earlier surge. It’s now up just one cent, at $1.22, having hit $1.23 earlier. |
| Investors may be watching parliament, where David Davis, secretary of state for exiting the EU, has insisted no party will get a veto on Brexit. | Investors may be watching parliament, where David Davis, secretary of state for exiting the EU, has insisted no party will get a veto on Brexit. |
| 1.32pm BST | 1.32pm BST |
| 13:32 | 13:32 |
| A fascinating debate is underway in the House of Commons now, as MPs discuss how they will scrutinise Brexit. | A fascinating debate is underway in the House of Commons now, as MPs discuss how they will scrutinise Brexit. |
| Keir Starmer, Labour’s shadow secretary for exiting the EU, is arguing that parliament must get a vote on the terms of leaving the European Union. | Keir Starmer, Labour’s shadow secretary for exiting the EU, is arguing that parliament must get a vote on the terms of leaving the European Union. |
| Other members are agreeing, including former attorney general (and Conservative MP) Dominic Grieve: | Other members are agreeing, including former attorney general (and Conservative MP) Dominic Grieve: |
| Tory Dominic Grieve savages @theresa_may for not putting major treaty change - Brexit terms - to Commons for vote | Tory Dominic Grieve savages @theresa_may for not putting major treaty change - Brexit terms - to Commons for vote |
| Chris Bryant talking the Ponsonby rule, Dominic Grieve talking about the convention of an "affirmative vote" in PArliament for a treaty... | Chris Bryant talking the Ponsonby rule, Dominic Grieve talking about the convention of an "affirmative vote" in PArliament for a treaty... |
| In English - this is the sound of the @HouseofCommons taking back control. Incrementally. https://t.co/3aE2CC2dmt | In English - this is the sound of the @HouseofCommons taking back control. Incrementally. https://t.co/3aE2CC2dmt |
| Andrew Sparrow is live-blogging the whole thing: | Andrew Sparrow is live-blogging the whole thing: |
| 1.27pm BST | 1.27pm BST |
| 13:27 | 13:27 |
| We know that the pound hit a record low last night, but which way might it move next? | We know that the pound hit a record low last night, but which way might it move next? |
| Kallum Pickering, senior UK economist at German bank Berenberg, suggests sterling could suffer fresh losses if Brexit negotiations get off on the wrong foot. | Kallum Pickering, senior UK economist at German bank Berenberg, suggests sterling could suffer fresh losses if Brexit negotiations get off on the wrong foot. |
| The latest leg down for sterling reflects the shift in market expectations towards a hard Brexit following recent comments from Prime Minister May and her cabinet. | The latest leg down for sterling reflects the shift in market expectations towards a hard Brexit following recent comments from Prime Minister May and her cabinet. |
| Has sterling found a bottom? That depends on how Brexit negotiations play out. If the UK and EU clash noisily in the forthcoming negotiations or if the UK goes for a ’hard Brexit’, a risk we cannot rule out, sterling is likely to continue to sink further. | Has sterling found a bottom? That depends on how Brexit negotiations play out. If the UK and EU clash noisily in the forthcoming negotiations or if the UK goes for a ’hard Brexit’, a risk we cannot rule out, sterling is likely to continue to sink further. |
| But... | But... |
| If the UK and the EU agree to part ways in an amicable manner, and if the UK secures good terms for post-Brexit trade, sterling is likely to rebound along with the UK economic outlook | If the UK and the EU agree to part ways in an amicable manner, and if the UK secures good terms for post-Brexit trade, sterling is likely to rebound along with the UK economic outlook |
| 1.10pm BST | 1.10pm BST |
| 13:10 | 13:10 |
| Confidence among Britain’s food industry has been rattled since the Brexit vote, a new survey has found. | Confidence among Britain’s food industry has been rattled since the Brexit vote, a new survey has found. |
| Although the weak pound should help exports (making Mr Kipling cakes, Marmite and Scottish shortbread more affordable abroad), manufacturers are worried that they could face new tariffs once Britain leaves the EU. | Although the weak pound should help exports (making Mr Kipling cakes, Marmite and Scottish shortbread more affordable abroad), manufacturers are worried that they could face new tariffs once Britain leaves the EU. |
| 12.45pm BST | 12.45pm BST |
| 12:45 | 12:45 |
| The EU referendum vote has forced international investors to get up to speed on the intricacies of the UK parliament, the EU single market, the untested article 50, and scrutinise every Brexit-related headline out of London and Brussels. | The EU referendum vote has forced international investors to get up to speed on the intricacies of the UK parliament, the EU single market, the untested article 50, and scrutinise every Brexit-related headline out of London and Brussels. |
| The Financial Times columnist Janan Ganesh suggests markets should calm down.... | The Financial Times columnist Janan Ganesh suggests markets should calm down.... |
| Markets foolish to parse govt statements for clues. There's no plan. Each panic-inducing remark gets toned down. May as well ask your cat. | Markets foolish to parse govt statements for clues. There's no plan. Each panic-inducing remark gets toned down. May as well ask your cat. |
| 12.43pm BST | 12.43pm BST |
| 12:43 | 12:43 |
| An important point: | An important point: |
| May refuses to promise MPs a vote on Brexit before article 50 is invoked - Only promising debate - V big differnc - https://t.co/T9HYpxKWrf | May refuses to promise MPs a vote on Brexit before article 50 is invoked - Only promising debate - V big differnc - https://t.co/T9HYpxKWrf |