The British pound has hit a one month high in today’s trading session on the back of positive local data and expectations that a deal on Brexit may be just weeks away.
The European Union’s chief negotiator on Brexit, Michel Barnier, noted in an interview that it is “realistic” that a Brexit deal can be reached between the UK and the EU during the 8 weeks if both sides knuckle down and are prepared to compromise
“The treaty is clear, we have two years to reach an agreement before the the UK leaves in March 2019. That means that taking into account the time necessary for the ratification process in the House of Commons on one side, the European parliament and the council on the other side; we must reach an agreement before the beginning of November. I think it is possible.” Mr Barnier said.
Also lifting the pound today was the release of strong job figures, which came in well above expectations and firmly put a rate hike from the Bank of England on the table in the coming months.
The unemployment rate released earlier today held steady at 4 percent but it was the wage growth figures, which drew the mast attention coming in at 2.6 percent against predictions for a figure of 2.4 percent.
Then numbers now sit above the current inflation level in the UK of 2.5 percent and may be enough for the BOE to deliver one more rate hike before the year ends.
Some would like to see at least one more rate rise this year and a further few next year.
Wage growth is up. Why hold back on further rate rises. The BoE should raise rates to 1 per cent in November, and to 1.5-2 per cent by [the] end of 2019.” Said former BoE policymaker Andrew Sentence.