By Ashley Finill
Boris Johnson to face the music at PMQs today
Boris Johnson is once again in hot water as yesterday it was reported that the prime minster attended a “Bring your own booze” party at number 10 back in May of 2020 whilst the rest of the UK were under strict lockdown rules imposed by the government at that time. Since news of this broke there has been mass ill feeling and a lot that emotion was felt in the House of Commons as MPs shared their dismay and their own and their constituents’ hardships during this time whilst the alleged parties were being thrown. With emotions high in the House of Commons yesterday these stories and allegations were put to the government although with very few representatives in the House for the Tories. A spokesperson for No 10 has said that investigations are underway for this new allegation. These new reports of the party saga will almost certainly bring further unrest amongst the Tories and has the potential to add fuel to the fire of a potential vote of no confidence in the prime minister Boris Johnson. Back in early December it was reported that off the back of the parties coming to light some Conservative MPs were drafting letters as a vote of no confidence, Boris will undoubtedly be in for a tough couple of weeks and starting today as the Prime Minister’s Questions are held in the House of Commons with Kier Starmer back in the House after testing positive for Covid a couple of weeks ago, a fiery exchange between the pair is expected with many MPs wanting definitive answers to the questions put to the PM.
Sterling continuing to hold Strong
The last few weeks have shown very positives signs for sterling amid some anxiety that came when the Omicron strain was found. Sterling initially lost ground on the Euro and Dollar as lockdowns and restrictions were feared in the UK back in mid-December. However, due to the booster rollout being somewhat successful and hospital admissions not as feared, restrictions were put on hold in England which saw sterling rally to levels not seen since the pandemic began, giving Euro buyers a treat for Christmas. Now we are into 2022 it’s more of the same as the Pound is holding strong. A recent report from Barclays is also backing the pound to remain strong and with more potential gain in the future all going well. It may not all be rosy though given the above in regard to Boris Johnson, if there is unrest amongst the Conservative party and a change at the helm is put in motion then we can expect these gains to be short lived with political uncertainty the achilles heel for sterling. As seen in the past many times, when there is uncertainty and an unexpected change in the top job in government the markets react, with sterling more often than not paying the price quite literally; if you are looking to buy Euros in the future and have a more risk averse approach then a forward contract may be the right option for you which allows you to secure your currency in full with only a 10% deposit. Please follow the link below for more information or contact your currency consultant who will be happy to answer any of your questions and guide you through the process.
Data today and rest of the week
Some key data coming out today from the Eurozone, UK and the US. Starting in the EU at 10am industrial production figures are to be posted with a contraction expected from last month’s figure of 1.1%. From the UK NIESR GDP Estimate will also be recorded, this is an estimated growth over the last 3 months in the UK. Over to the US as Consumer Price Index is announced, a contraction is expected by half from last months reading of 0.8%. Only a few bits of data worth noting for the close of the week as Thursday sees the US release Jobless claims and prouder price index. Finally seeing out the week on Friday the UK post Gross domestic Product, Industrial Production & Manufacturing Production early doors at 7am.