FTSE holds ground as UK ministers resign
Speculation over whether the UK government will survive in its current shape were rife over the last week and finally the other shoe dropped late Sunday as the Brexit secretary David Davis and several other ministers resigned over the weekend. Calls are getting louder for Theresa May to resign opening up questions not only about the future of the UK government but also the whole Brexit deal Britain is working on. In the short run Theresa May will have to find a new Brexit secretary while facing a potential leadership challenge.
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Speculation over whether the UK government will survive in its current shape were rife over the last week and finally the other shoe dropped late Sunday as the Brexit secretary David Davis and several other ministers resigned over the weekend.
Calls are getting louder for Theresa May to resign opening up questions not only about the future of the UK government but also the whole Brexit deal Britain is working on. In the short run Theresa May will have to find a new Brexit secretary while facing a potential leadership challenge.
Pound firms in the wake of Brexit news
London stocks are still ignoring the political backdrop and investors are focusing on company news which is helping the FTSE 100.
The pound is still holding up against the euro, trading 0.16% higher, and is comfortably higher against the dollar, up 0.33%. European stocks are also trading higher, particularly in Germany where the latest trade data showed that the country’s exports grew faster than imports last month and that the tariffs put in place by the US on European imports are not yet affecting Europe’s largest economy.
There is a similar picture in Asia – although the US started imposing tariffs on Chinese goods last Friday the effects are not yet being felt by companies. Asian shares started the week with strong gains supported by higher-than-expected job growth in the US. Japan’s Nikkei rallied 1% to a one-week high.
US data indicates higher inflation
US jobs and wages data will be the envy of many an economy with unemployment at a low 4% and domestic wages rising by 2.7% on an annual wages basis.
But at the same time inflation pressures are beginning to build and domestic wholesale and consumer prices are moving to the highest level in six years being at over 3% and 2.8% in May, respectively.
Although the Federal Reserve is keeping a close eye on the numbers it doesn’t seem unduly worried about inflation in contrast to the blossoming trade tensions which have a bigger capacity to upset the American economy.
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