Political noises this morning that suggest those in Cabinet would have preferred the PM to wait until the Chancellor is ready to announce further support for the economy may have had the sterling price up on their screens or phones as, without further news of support from Sunak, sterling looks vulnerable up here.
Sterling had initially started the day positively with markets taking comments from BOE Governor Andrew Bailey around negative interest rates as a sign that we may be waiting a while until the base rate heads lower from here. Some think this could be a sign that the Bank didn’t know about the government’s plans for 6 months of lockdown, some also think that this could mean a positive Brexit resolution soon. I think we may be looking at a central banker who didn’t want to be tied down.
Interestingly enough, I am currently re-mortgaging my house and not a single bank I have spoken to has been able to tell me what would happen if I elected for a tracker and rates went negative.