Yesterday, the Sterling fought back after bearish comments by UK Chancellor of the Exchequer Philip Hammond who suggested that the Government would be happy to see more quantitative easing in the future. Sterling dropped to its lowest level since the ‘flash crash’ earlier this month before retracing back up to Monday’s levels. Although Sterling gained ground against the Greenback and the Euro yesterday, Brexit continues to blight the UK economic outlook. London house prices are forecast to drop 5.6% next year as uncertainty about Britain’s future dampens the market and the Resolution Foundation has predicted that there will be an £84 Billion weakening in the UK’s public finances over the next five years adding to the Currency’s woes.
In US politics, Donald Trump and the Republican party gained a boost yesterday. The latest Bloomberg Politics poll showed Trump held a two-point lead in Florida. In a hypothetical two-way race, Trump’s lead over Clinton drops to one point, highlighting the importance of the independent vote. Trump is now campaigning about the high costs of Obamacare which are due to increase in 2017.
UK’s first reading of Q3 GDP is released Thursday morning. Economists’ forecast that this will drop 0.4% from Q2’s 0.7%. This is the first post-Brexit GDP data released, which is why GDP is forecast to post its worst reading in over a year. In the afternoon the US release their durable goods figure and unemployment claims reading, both expected to improve on the previous numbers.