3rd July 2017
Government Focus Falls into Place
This week the fallout from the general election has come to some sort of a conclusion with the passing of the Queen’s speech on Thursday.
A consequence of the government’s new position is that much of the planned legislation has had to be abandoned and the focus will mostly be Brexit. This is actually a good thing. The amount of legislation and complexity involved in leaving the EU has continuously been underestimated, at least in public; an acknowledgement that it will be the sole focus of this government (and probably at least the next couple) is a welcome, albeit accidental bit of honesty.
Elsewhere an old favourite, interest rate speculation, has come back with gusto. Following the revelation of a split in opinion on the Bank of England’s Monetary Policy Committee, there has been a noticeable uptick in fortune telling. The Governor’s comments on household indebtedness this week can’t be called in either direction – but further underscores the problems facing the bank. A sustained period of low interest rates is having undesirable consequences, but the economy hasn’t recovered enough to warrant rate rises.
Read this weeks Full Market Commentary below.