S&P warn over no deal Brexit
The warning from the S&P echoes previous warnings from businesses leaders and leading economists. The picture painted by the rating agency was dismal, with a recession forecast, unemployment rising to levels last seen in the financial crisis, house prices falling by 10% and inflation jumping to 4.7%. These stark figures come just one day after the Chancellors optimistic budget. The pound is now trading over 11% lower from its peak in April and its lowest level since mid-August.
Investors will now look towards tomorrows consumer confidence data, which unlikely to prompt the bulls to buy in. Thursday’s Bank of England’s super Thursday will attract a good amount of attention. However, pound traders are fully aware that the health of the UK economy rests solely on the UK’s ability to seal a deal with the EU.
US consumer confidence at 18 year high
Also working against the pound was a significantly stronger dollar. The dollar rallied as US consumer confidence hit a fresh 18 year high, unexpectedly climbing to 137.9. Analysts had expected confidence to dip slightly to 137.9. Despite the recent rout in the stock market US consumers confidence grew at the fastest pace since 2014. Higher confidence means Americans are spending as strong jobs market supports households. As we head towards the mid term elections, it is clear that Americans are confident in their outlook for the economy.