May on standby as Article 50 set to be triggered
- Article 50, trigger or not to trigger
- Merkel’s government sets priorities for EU-UK talks
- US consumer confidence surges to 16 year high
Theresa May has stated that she intends to deliver the letter that triggers Article 50 to Donald Tusk today, initiating the Brexit process.
Both sides of the channel are currently finalising their negotiation positions during these last few hours before Article 50 is triggered. The pound has broken to a two month high against the dollar over the last few days, but its ability to rise may be hindered by the political uncertainty surrounding Brexit. Bloomberg analysts have suggested that there may be an initial market shock when the official announcement is made, but the real risk to the pound will be the aftermath as rumours and press releases may exacerbate anxieties regarding ongoing trade negotiations. Regardless, it is clear that these negotiations will define the future of both British and European economies for decades to come.
Merkel’s government sets priorities for EU-UK talks
One of Merkel’s key priorities for Germany when Brexit negotiations take place includes ensuring that the UK pays off its remaining EU bills.
Merkel has been increasing pressure on UK PM Theresa May to acknowledge the necessity of paying off this debt, which the European Commission has estimated to be around £60 billion. As Brexit will result in the loss of the EU’s second largest net payer, Germany is determined to effectively manage the fiscal and domestic political risks associated with increasing its contributions.
US consumer confidence surges to 16 year high
Consumer confidence in the US has reached its highest levels in the past 16 years as Americans have become increasingly positive about both current and future conditions.
The confidence index rose to 125.6 (expected was 114), which is its highest since December 2000. This optimism has been primarily accredited to the rising stock market and strong labour market conditions. Following this announcement, the dollar strengthened and as a result GBP/USD fell 0.7% over the course of the afternoon. Strong US economic data will only serve to enhance the chance of further US interest rate hikes in 2017.
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