Sterling slumps as Brexit bill passed
The pound has fallen to its lowest level against the US dollar since Theresa May’s Brexit objective speech in mid-January after Parliament finally passed the Brexit bill overnight. The depreciation in sterling has boosted stocks with the FTSE 100 higher by 12 points and the benchmark remains within striking distance of all-time highs.
Peers back down over amendments
This morning the Brexit bill has headed for Royal Assent and is expected to be passed into law before the day is out. The bill allows the government to trigger Article 50 which would serve as a formal notification of the UK’s exit from the EU in two years’ time. Whilst there has been some frustration as the bill has been ping-ponging between the lower and upper houses for the past couple of weeks, the news that the House of Lords had backed down overnight paves the way for the government to meet their self-imposed deadline of triggering Article 50 before the end of March. Despite the political tit for tatting, this was seemingly the most likely outcome and even though the pound has dropped on the news it shouldn’t come as a major shock to traders. The selling in sterling could be described as measured so far today with declines ranging from 0.5-0.7% against most major peers. Even when Article 50 is triggered the market shouldn’t treat it as too much of a shock as this has been in the pipeline for many months and Theresa May likely imposed a deadline on the event in an attempt to reduce uncertainty as much as possible.
BoE member Hogg resigns
Charlotte Hogg, the deputy governor for markets and banking at the Bank of England, has handed in her resignation today following a conflict of interest scandal. The issue arose while Ms. Hogg was being questioned by MPs after she told them her brother had a senior role at Barclays (LON:BARC). The Bank’s code of conduct, which she contributed to the drafting of, states that employees must declare any such connections. Despite her resignation, she will still vote for the first and last time on monetary policy at this week’s meeting, which is widely expected to see interest rates kept on hold at a record low.
Prudential (LON:PRU) leads the risers
The best performing stock on the FTSE 100 this morning is Prudential, with the insurer rising around 3% after reporting a 7% rise in group operating profits. The increase was largely thanks to the strong levels of growth seen in its Asian business, which rose by 28% to £1.5bn. Other stocks enjoying moves higher are easyJet (LON:EZJ), Severn Trent (LON:SVT) and Rolls Royce (LON:RR) with all three just shy of posting 1% daily gains. At the other end of the index the banking sector is seeing some selling with RBS (LON:RBS), Lloyds (LON:LLOY) and Barclays all in negative territory.