By Matthew Vassallo
Sterling received a timely boost earlier this week following the announcement of a new Brexit deal between Northern Ireland & the EU. UK Prime Minister Rishi Sunak and President of the European Commission Ursula von der Leyen announced the new deal earlier this week, which is aimed at fixing the post-Brexit problems in Northern Ireland.
This agreement has been a long time in the making and should go a long way to solving the current issue of goods coming from inside the EU to Northern Ireland, before making their way across the Irish border to the Republic of Ireland. The current process has been an increasing point of contention, due to the previously laboured and time-consuming process. Both Mr Sunak and Ms von der Leyen were both keen to emphasize the significance of the agreement, which immediately gave the Pound a boost upon its announcement.
Sterling jumped by approximately a cent against the Euro, whilst gaining almost two cents against the US Dollar since the start of the week. These gains have thus far held during the early stages of Wednesday’s trading and there does seem to be a slight shift in market sentiment around the prospects of a much-needed upturn in the UK’s economic recovery.
Looking ahead and Bank of England Governor Andrew Bailey is giving a speech later today, which could provide the markets with a key insight into the central bank’s current economic predictions. Mr Bailey will likely mention the NI/EU Brexit deal and what positive impact this may have in the short-term, along with an update on the UK’s current cost of living crisis and high inflation levels.
With little other UK economic data of note for the rest of this week, the markets focus will likely switch to US Manufacturing data later today and initial Jobless data & Non-Farm Productivity figures released tomorrow.