Mark Carney: Sterling rebound reflects expectations that no-deal Brexit less likely – business live | Business

The Bank of England Governor Mark Carney

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Mark Carney has played the ‘adult in the room’ role a few times since he joined the Bank of England in 2013. And today, MPs and investors alike will be looking to the BoE governor as he testifies to parliament on the UK’s financial stability.

He’ll be quizzed about the City’s ability to handle Brexit, and the preparedness (or otherwise) of firms for a cliff-edge, or disorderly, departure.

He’ll be accompanied by Alex Brazier, Executive Director for Financial Stability Strategy and Risk, and two external members of the financial policy committee — Anil Kashyap and Richard Sharp. It kicks off at 9.15am.

Carney’s hearing is well-timed — barely 12 hours after MPs threw Brexit into fresh chaos by sensationally rejecting Theresa May’s deal by a historically thumping 230 votes.

May now faces a confidence vote tonight, while the rest of the country faces further uncertainty. Will the UK crash out without a deal on 29th March? Will MPs now force a softer Brexit, a second referendum, or even a revoke Article 50 altogether?

The markets are taking the uncertainty remarkable well. Sterling is hovering around $1.28 against the US dollar – having swiftly rebounded from yesterday’s losses last night.

Pound vs US dollar

Pound vs US dollar this week Photograph: Thomson Reuters

That doesn’t mean the business world are relaxed about the situation, of course, with barely 70 days until Brexit day (delays and cancellations notwithstanding).

Allie Renison, head of Europe and trade policy at the Institute of Directors, warned Bloomberg TV that the vast majority of companies simply aren’t prepared for a no-deal, so they want parliament to move swiftly onto the next step.

Robert Ward, editorial director of the Economist Intelligence Unit, reckons Theresa May options are running thin…

Robert Ward

Unable to command her party or parliament, Theresa May limps on, sustained by #Brexit policy chaos on all sides, lack of an obvious replacement. But her options & time running out. Also hard to see her surviving a 2nd referendum scenario. #BrexitVote

January 16, 2019

We also discover whether the Brexit uncertainty has hit house prices this morning. Plus new inflation data, which may show the consumer prices rose by 2.1% per year in December, down from 2.3% in November.

The agenda

  • 9am: World Economic Forum issues 2019 Global Risks Report.
  • 9.15am GMT: Mark Carney testifies on financial stability at the Treasury committee
  • 9.30am GMT: UK inflation data for December
  • 9.30am GMT: UK house price data for November

Source link