Everyone Hates An (Established) UK Party
A recent YouGov opinion poll showed that the UK’s ruling Conservative Party would suffer its worst general election results ever if a vote were to be held now, while with the main opposition Labour Party would suffer its worst performance since 1918. The Liberal Democrats and Brexit party, which took unequivocal positions for or against Brexit, would be expected to favour strongly. These results indicate the growing frustration over how Brexit has been handled by both major parties in Parliament.
Meanwhile, the Bank of England’s deputy governor, Dave Ramsden, seems to have been on perceptions damage control yesterday, highlighting that a smooth Brexit should be accompanied by a hike in interest rates following a likely pick-up in growth pressures, although he did also say “The response would not be automatic and could go either way: rates could go up or down as the situation demands”. These comments seem to have put a dampener on the UK Gilt rally throughout May.
There will be a month-end flurry of data released today with April’s money supply and credit lending report due alongside nationwide house price data. There have been some nascent signs of an increase in mortgage advances and investors will be keenly awaiting confirmation of the trend as a barometer of underlying uncertainty. Fingers crossed… but don’t hold your breath too long!
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