PM to Face Privileges Committee over Partygate

By Ashley Finill

Boris on the ropes again

Boris Johnson is once again facing the music over the parties held at downing street, which have been deemed unlawful by the police. The gatherings were held during strict lockdown rules set by his own government resulting in fines being issued by the police to the prime minister and some members of his cabinet and aides. Boris has faced persistent backlash since the news broke of “partygate” and as the alleged rumours became fact there has been utter discontent amongst parliamentarians and the general public calling for the PM’s resignation. Having so far ducked and dived the punches thrown from opposition and the media, a new blow has been dealt by the Labour party as MPs have back a Labour led motion calling for the privileges committee to examine allegations that Boris Johnson misled Parliament when he denied lockdowns rules were being broken at Downing Street. The prime minster only yesterday informed reporters that he will not step down and intends to stand at the next general election, but this could be a round too far for Boris and could see him knocked down and out before the cards are counted. With uncertainty in the PM’s position starting to seriously mount, this is likely to sway sterling into a more vulnerable position. With uncertainty being the pound’s foe, sterling relies heavily on political stability for it to flourish against the other majors currencies but with the current economic crisis facing the UK due to high inflation, mainly a consequence of the pandemic and also the tensions seen in eastern Europe having a strong hold on the currency market, sterling already finds itself on thinly iced road and unplanned change for the top job in the country during these unprecedented times the pound could suffer big losses and scupper its hard earned gains against the Euro over the past 12 months and continue its poor performance on very strong dollar.

French elections held on Sunday

This Sunday the presidential leadership race for France will come to an end as the French will vote on their next president, will it be another term for Emmanuel Macron who is currently leading the polls, or could there be a shock in store and a surprise win for Marine Le Pen? This is Marine Le Pen’s third time of running for the presidency and is seemingly the closest she has been amongst voters to win but as polls would suggest still not enough for her to gain power. Macron is hoping to be the first president in 20 years to be re-elected and would be only the fourth to do so since 1958. The election result will give a better insight to how the nation of France is feeling towards the topics like France leaving the EU which Le Pen has been outspoken about and tougher immigration policy, also current issues regarding Russia as President Macron pointed out during a live debate that Le Pen has direct links to Vladimir Putin. Le Pen is also a US-Sceptic and with her links to Moscow has an at arm’s length attitude towards NATO, given the current crisis in Ukraine and NATO being a trusted ally this may sway voters’ hands in the ballot box and give Macron the edge come Monday morning.

Data today

Sterling already finds itself on the back foot this morning as the UK released retail sales figures. The figure fell by 1% from last month’s reading of -0.5% to -1.5%. Retail sales figures shows the appetite of consumers and with this month’s contraction it is clear that rising prices in energy, fuel and food prices are tightening the pockets and spending amongst the nation. With interest rates unlikely to be risen again in the UK in the short term the UK economy may have some way to go before seeing a reversal in fortunes as analysts are suggesting that the UK could be heading into a recession in the later part of this year. The Fed are reportedly set to rise the interest rate in the US by 50 base points to 2% later this year to curb inflation something that the Bank of England may be also forced to do, and we may have some insight on whether that is the feeling amongst members of the monetary policy committee at the BoE as later today Governor Bailey speaks at 2.30pm. The ECB’s president Christine Lagarde also speaks at 1pm and may talk about rising inflation within the EU and how they look to combat it. We may see some volatility in the market between 1-3pm today due to the speeches so it may be worth getting in contact with you currency consultant this morning if you have any currency requirements so that you aren’t caught out in the unpredictable currency markets.