There’s not much in the way of top-tier economic events in the U.K. this week, save for a couple of central bank speeches. More Brexit drama, anyone?
BOE officials’ speeches (starting Sept. 23, 9:15 am GMT)
After last week’s relatively cautious BOE decision, a handful of policymakers are set to share more thoughts during their testimonies.
First up, we’ve got MPC Member Silvana Tenreyro scheduled to speak at the European Central Bank Conference, during which audience questions are expected. Based on her previous testimonies, she doesn’t see much reason for the central bank to tighten policy at all, as inflationary pressure remains weak.
Next we’ve got the main man BOE Governor Carney himself set to participate in a panel discussion about the future of financial services at the European Systemic Risk Board annual conference on September 26, 1:45 pm GMT.
In his earlier speech, Carney warned that a global economic slowdown might be underway but that negative deposit rates in the U.K. aren’t really necessary. However, it’s also important to remember that he mentioned this about Brexit during the BOE statement:
The longer those uncertainties persist, particularly in an environment of weaker global growth, the more likely it is that demand growth will remain below potential, increasing excess supply”
Lastly MPC Member Michael Saunders is scheduled to speak at a at briefing hosted by Barnsley and Rotherham Chamber of Commerce & Barnsley Institute of Chartered Accountants on September 27, 7:00 am GMT.
U.K. Supreme Court Ruling
Last week was mostly filled with hearings and appeals in the U.K. Supreme Court, pushing their ruling on the prorogation to early this week.
According to Jeremy Corbyn, if the Supreme Court rules that PM Johnson’s decision to prorogue is unlawful, then they would take more action to ensure that No. 10 can’t attempt to pull the same move again.
In that case, Johnson would have to face strong opposition from lawmakers keen on blocking a “no deal” Brexit by October 31. Keep in mind that those against the prorogation are accusing the Prime Minister of trying to “silence Parliament” for the longest period in 40 years.
Of the 12 judges on the Supreme Court, 11 will rule on this case so that there won’t be a split decision. As it is, market watchers are looking at these potential outcomes:
- The suspension is unlawful. Parliament remains in session.
- The suspension is unlawful but offer ways to make the prorogation legal.
- The suspension is lawful, but the Prime Minister has to recall Parliament before the Queen’s Speech on October 14.
Supreme Court rulings are usually handed out on Wednesdays, so expect some consolidation among pound pairs before the announcement and stronger volatility during the event.