Sterling fell -0.65% earlier as Bank of England governor Mark Carney fudged a rate hike commitment in the near future. Carney was speaking to MPs before the Treasury Select Committee. He said a rate rise now “isn’t consistent” with longer term economy and inflation goals. Sterling was also knocked back by remarks from the OECD which claimed UK growth prospects would be boosted if Brexit was reversed.
The OECD zeroed in on the risk of falling UK investment and the price pressures – not helped by this morning’s +3% inflation confirmation from the ONS – that Brexit may bring.
A short time before 4pm sterling was trading at $1.3167 while the euro was down -0.47% at $1.1753. The dollar took strength from more Wall Street bullishness – the Dow hit an intraday 23,000 higher earlier – not to mention weaker business sentiment from Germany.
At close of business the FTSE 100 was down 10 points at 7,516 with Pearson climbing more than +7% while ConvaTec shares recovered slightly, up almost +4%, from Monday's massive crash. Investors failed to be impressed by Merlin Entertainment's tie-up with Peppa Pig – its shares were down almost -16%.
- UK FTSE 100 7,516.1 -0.14%
- Dow 22,981.28 +0.10%
- S&P 500 2,556.09 -0.06%
- Nasdaq 6,619.35 -0.07%
- Nikkei 225 21,336.12 +0.38%
- DAX 13,025.21 +0.17%
- CAC 40 5,374.66 +0.22%
- Gold 1,287.60 -1.18%
- Oil WTI 52.11 +0.46%
OECD downbeat on UK productivity & prospects
The OECD’s latest survey is pretty dismissive on UK prospects at points. “Over a quarter of workers in the United Kingdom have only low skills, which holds back labour productivity and job quality. Raising skills is a priority given plans to reduce net migration,” it said.
About 45% of UK exports “are destined for EU27 countries,” it added, “and are greatly facilitated by EU membership, which implies participation in both the EU single market and customs union.” Clearly Brexit anxiety continues to run deep.