PM May has survived her immediate post- conference leadership challenge, but remains vulnerable as Brexit talk tensions and a lowering of growth projections as the autumn budget approaches are likely to weigh on GBP, according to Tim Riddell, Research Analyst at Westpac.
“Recent data firmer than expected, but the details still raise concerns over the pressures on household finances. BRC’s retail sales survey showed a concentration on essentials and forward indicators bode caution. However, production data was firm. Next week’s Sep. CPI may show signs of peaking (markets expect Oct. to mark the high) but still leave MPC (2 Nov) poised to withdraw some of the post-Brexit-vote accommodation.”
“Brexit uncertainty and erosion of govt’s financial margin for manoeuvre into the autumn budget are likely to keep GBP capped with ranges likely to have already been established for this month in both EUR/GBP and GBP/USD.”
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