UK business confidence weakens

A rather ghastly UK PMI in the construction sector confirmed that UK business confidence is weakening noticeably, though it is hard to disentangle the Brexit effect from the worldwide downturn in sentiment.

While pressure is growing for a cut from the Bank of England, the Pound will be driven by the evolution of the Brexit negotiations more than backward looking economic data. We remain of the opinion that a Brexit postponement and a general election in November is the most likely scenario, and therefore see room for modest short-term gains in the Pound.

UK PMIs (2016 - 2019)

Source: Refinitiv Datastream Date: 07/10/19

Author: Enrique Diaz-Alvarez, Chief Risk Officer at Ebury

Keywords Ebury