A handful of major economic reports are lined up from the U.K. this week, but the spotlight would likely stay on Brexit. Here’s what you should watch out for.
U.K. Industry PMIs (starting Oct. 1, 8:30 am GMT)
It’s almost the start of a brand-new month, which means a fresh batch of PMI readings from the U.K. manufacturing, construction, and services sectors!
First up is the September manufacturing PMI due on Tuesday’s London session. Analysts are expecting to see a dip from 47.4 to 47.0, reflecting a faster pace of industry contraction. If so, it would mark the reading’s fifth consecutive month below 50.0 to indicate persistently deteriorating conditions.
Next is the construction PMI lined up on October 2, 8:30 am GMT. This figure is projected to hold steady at 45.0 for September, still reflecting industry contraction and possibly its fifth month below 50.0 as well.
Lastly, the services PMI is up for release on October 3, 8:30 am GMT. Number crunchers estimate that the reading could dip from 50.6 to 50.3 for the month, showing a slower pace of industry growth.
However, a weaker than expected read or a drop below the 50.0 level could generate a strong bearish reaction from sterling as the services sector accounts for a huge chunk of overall economic performance.
And the plot thickens for Brexit once again! Now that the U.K. Supreme Court ruled that the prorogation of Parliament was unlawful, MPs can be able to come up with legislation to block a “no deal” Brexit from happening.
This means, the pressure is on for PM Johnson to either secure a better transition deal with the EU or ask for an extension. However, he has been pretty adamant about getting the U.K. out of the bloc by the October 31 deadline, so we might see a lot of butting of heads in the coming days. Nothing new, really.
Scottish First Minister Nicola Sturgeon has brought up the idea of a no confidence vote in PM Johnson, adding that her political party is willing to back Jeremy Corbyn as interim leader.
The Tory Pary Conference is already underway from September 29 to October 2, and this gives No. 10 a chance to rally more support for his leadership and Brexit plans. Many also expect the party to come up with alternative transition deal proposals by the end of the week.
Missed last week’s price action? Read the GBP price recap for September 23 – 27!