The Pound traded flatly versus most of the majors at the end of the week, even as UK consumer confidence tumbled and deputy Prime Minister Damian Green was forced to resign.
The latest UK consumer confidence index came in at -13, down from -12 previously, while sentiment was also hurt by news that British car manufacturing was on course for its first annual fall in eight years. In the 11 months to December, UK car production shrunk -2% to 1.58 million vehicles. If the trend persists through December then it will represent the first time that factories have suffered an annual decline since the midst of the financial crisis in 2009, when production crashed -31% to just under 1 million cars.
Sterling also had to contend with news that British Prime Minister Theresa May had forced her deputy Damian Green to resign after it emerged he had made misleading comments about pornography in his office during an internal investigation. The resignation of another key cabinet member was seen to put more pressure on the PM ahead of the next round of Brexit talks.
Pound to Euro (GBP/EUR) Exchange Rate Close to 21-Day Low
The Pound to Euro exchange rate remains close to 21-day lows, however, the single currency was unable to register additional gains during yesterday’s session.
It seems the negative impact of falling consumer confidence and fresh political controversy were met with the mildly positive news that UK public sector borrowing came in lower-than-anticipated for November. Compared to calls for £9.0 billion, it emerged yesterday that the government borrowed £8.7 billion to balance the books last month. The result suggests that UK Chancellor Philip Hammond could well meet his target of borrowing £49.9 billion this fiscal year.
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