Finance

Pound enjoying Brexit ruling

By Edward Twist
Finance
Published: 4 November 2016

Despite the sudden turmoil in government after the ruling in the High Court yesterday that Article 50 of the Lisbon Treaty cannot be triggered until Parliament have been able to vote on it, one beneficiary has been the beleaguered pound.

The uncertainty on Brexit has meant the currency has enjoyed its best day in a while as it notched $1.24 against the dollar which was welcome news following weeks of falling to multi-year low points against its main rivals since Britain voted on the 23rd June for Brexit.

As ever on the financial markets, this gain is offset with a fall in the value of the FTSE 100, which had been riding high on the weakness of the pound as this enables UK exports to be much more competitive.

It was down 0.5 percent in afternoon trade, while Frankfurt added 0.07 percent and Paris climbed 0.5 percent.

City analysts see the decision by the court to pass the matter back to Parliament as inevitably going to make the process of leaving the European Union that much more difficult and will at the very least delay the process of triggering Article 50 well into the New Year. This short-term stability has given the currency a boost.

However, the legal wrangling isn’t over yet because the government has already stated it will appeal the decision in the Supreme Court by the end of this year.

The Bank of England revised upwards its GDP economic growth forecast for the year ahead to 1.4 percent, up from 0.8 percent and by freezing interest rates at the record-low 0.25 percent. The revision comes on the back of the failure of predictions of post-Brexit economic chaos to materialise.