Front pages of the UK papers today

Front pages of the UK papers today Composite: Various

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

A day is a long time in the markets, as Harold Wilson might have said had he swapped Westminster for the City.

Just 24 hours after plunging below $1.20 to its lowest levels in three years, the pound has recovered all its losses. It’s the best-performing major currency so far today, sitting comfortably over $1.21 as London traders get to work.

The sight of Boris Johnson suffering a humiliating defeat in the House of Commons last night is actually providing sterling with some support. MPs have taken control of Parliamentary business, and will vote today on whether to rule out a no-deal Brexit on 31 October.

Ian Fraser
(@Ian_Fraser)

Boris Johnson becomes the first UK prime minister to lose his first @HouseofCommons vote since fellow Old Etonian Archibald Primrose, 5th Earl of Rosebery who only lasted a year in Downing Street. https://t.co/dNq3SUtBM6


September 3, 2019

Having staged a recovery yesterday, sterling is up another half a cent this morning at $1.214.

Investors have also noted that the government’s majority is in tatters, after 21 Conservative MPs dramatically rebelled, including several highly experienced former top ministers. They’ve been kicked out of the parliamentary party — underlining that Johnson now lacks a parliamentary majority.

Such a crisis would usually weaken a currency. But sterling is actually benefitting, as it bounces back from Tuesday’s slump.




The pound vs the US dollar this week

The pound vs the US dollar this week Photograph: Refinitiv

Johnson has insisted he won’t ask for a Brexit extension, and is instead pushing for an election. The opposition, though, won’t provide the two-thirds majority required unless tonight’s bill blocking No Deal has been passed.

So it’ll be another huge day in parliament, with investors around the globe glued to the action.

Fears of a disorderly Brexit have been rising in the City in recent weeks. Yesterday, Goldman Sachs said it was a 25% chance, up from 20%.

But after last night’s political drama, investors are now hoping that such an outcome can be avoided.

Ipek Ozkardeskaya of London Capital Group believes there could be more upside for the pound:


It is worth keeping in mind that a snap election is a risky bet for Boris Johnson. If he loses, he will be the shortest serving PM in the country’s history, and more importantly, the Labour Party would opt for a second Brexit referendum to make sure this is what Brits really, really want.

An election as early as next month could give another shake to the sterling, but even a tiny hope of preventing Johnson from crashing out of the EU without a deal could help the currency.

Also coming up today

A new healthcheck on Britain’s services sector is likely to show growth slowed last month. We already know that manufacturing and construction both shrank in August.

Brexit will also be on the agenda when Bank of England governor Mark Carney and colleagues appear before the Treasury committee this afternoon.

The agenda

  • 9am BST: Eurozone services PMI for August
  • 9.30am BST: UK services PMI for August (expected to drop to 51 from 51.4, showing slower growth)
  • 2.15pm BST: Treasury Committee hearing with Bank of England over inflation report and Brexit




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