The pound starts post-Brexit poorly
Currently the markets believe there’s a 70%+ chance of this happening. Same as last week, this week’s economic data will be closely watched for more signs that the UK economy is slowing which could push the other BoE members into cutting interest rates sooner rather than later. 2 out of the 9 members have voted for a cut in the last two meetings. Since then other BoE members have voiced their concerns and look likely to join the two looking to cut interest rate if this week’s data fails to show improvements. (Historically when a central bank looks to cut its key interest rate, its currency would devalue, this is why the markets are paying so much attention to what the BoE and ECB are saying).
The Conservative Party have, at the time of writing, secured 364 seats which gives it a clear majority in Parliament and prompting Jeremy Corbyn to say he will not lead the Labour party into the next election. This also followed Jo Swinson’s loss in Dunbartonshire East and the Liberal Democrats have announced that she would be stepping down with a leadership contest that would be held in the New Year. Meanwhile, following the strong showing of support for the SNP, Nicola Sturgeon has vowed to demand powers for a Scottish independence referendum.