The pound had another difficult week. GDP expanded by just 0.2% in the fourth quarter, just a third of what it achieved in Q3. The trade deficit widened in December and business investment fell 1.4% in the quarter and was down by 3.7% for the year as a whole. Parliament’s Treasury Committee published its “unanimously-agreed” report on Budget 2018 and noted their concern over the veracity of chancellor’s promise of a Brexit “deal dividend”.
Bank of England Governor Mark Carney also reiterated the possibly disastrous consequences for the UK economy if the UK leaves the EU without a deal. Despite challenging numbers, the pound held relatively steady, but once again political debate over Brexit weighed heavy on the pound, which dropped in anticipation of Theresa May’s address to parliament and fluctuated more as it became clear that there was no new detail. The PM repeatedly urged MPs to vote for a deal as the only way to avoid a no-deal scenario and there are concerns that May is running down the clock to force parliament to accept the deal.
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