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Pound Jumps Following Brexit Ruling

Pound Jumps Following Brexit Ruling

The Pound has risen sharply following the High Court ruling that Parliament, rather than the PM Theresa May, has the power to trigger Brexit by notifying Brussels of the UK’s intention to leave the European Union. Following the announcement, the pound surged to $1.2450, breaking the $1.24 mark for the first time in more than three weeks. After the rise of the pound by 1.2 per cent, the focus moved to the Bank of England’s monetary policy update and inflation report which could potentially affect the sterling. After the reports were released later that day, it became clear that the Bank had left its key interest rate unchanged at 0.25 per cent, while keeping its QE program unchanged at £435bn. However, it sharply raised its growth forecasts for 2017 to 1.4 per cent compared with a previous forecast of 0.8 per cent.

However, this excitement is a bit premature as the ruling is set to be challenged by the Supreme Court next month. Connor Campbell of Spreadex said, “Even if it does go to a parliamentary vote, it is unlikely MPs will want to be seen as going against the referendum result by blocking the enacting of Article 50. Nevertheless the pound was due some good news, and it has certainly taken advantage of this brief glimmer of hope.” The current situation is that the pound climbed 1.4 per cent against the euro and 1.2 per cent against the dollar. It remains at €1.1243 and $1.2450 respectively.

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