GETTY - STOCK IMAGES The pound remained low agains the US dollar today after the general election resultIt is now broadly expected that the Conservati
The pound remained low agains the US dollar today after the general election result
It is now broadly expected that the Conservatives will be able to form a functioning government.
These are still early days, however, as an official agreement with the Democratic Unionist Party (DUP) has yet to be reached.
There currently appear to be few workable alternatives to such a government, but the unification process could still take up to a week, by which time Parliament will have resumed on June 19th.
Speaking on the likely timeframe for a Conservative-DUP agreement has been Defence Secretary Sir Michael Fallon.
[The partnership] doesn’t mean we now agree with all their views
Appearing on the BBC’s Andrew Marr Show, he said: “[The partnership] doesn’t mean we now agree with all their views.
“It would be very, very surprising if something as important and complex as this was stitched together in a single day of talks in Belfast.”
Crucially for the government, however, these talks need to conclude by June 19th as this is when official Brexit negotiations begin.
Sir Michael Fallon has spoken about the timeframe for a Conservative-DUP agreement
On the economic front, today has seen a spate of concerning announcements keep the pound under pressure.
Statistics agency IHS Markit has recorded a drop in consumer spending, the first such fall in nearly four years.
Another stats company, Springboard, has measured a -2 per cent drop in high street footfall, the worst since the -3.7 per cent slide seen after the 2016 EU Referendum.
Adding to this growing concern, the Institute of Directors (IoD) has seen a -34 point drop in business leader confidence since May.
This week could see further major pound volatility when UK inflation and earnings figures are released.
The US dollar was little moved last week by the testimony of James Comey
Tuesday is expected to see annual inflation in May remain at 2.7 per cent, while Wednesday is predicted to show average earnings with bonuses post 2.4 per cent in April.
Such a disparity may weaken the pound, as it will point to less retail spending in the future due to diminished real incomes.
It was speculated that Comey would provide reason to impeach President Donald Trump, but most of his comments were subject to interpretation.