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Hammond tries to calm fears of a No-Deal Brexit

By October 1, 2018September 27th, 2022No Comments

Pound Sterling was up 0.1% against the US dollar, standing at 1.304, following the news of stronger UK manufacturing growth. The Sterling was up almost 0.4% against the Euro, standing at 1.125.

Brexit secretary, Dominic Raab, suggested that the UK could be left with “no choice” but a no-deal Brexit if the EU attempts to “lock us in” to a customs union. Raab’s stance is that UK will not compromise “without limits”.

According to the latest data from Markit, manufacturing sector activity in the UK economy sector picked up in the month of September.

In September, the UK manufacturing Purchasing Managers’ Index (PMI) reached 53.8 points, compared to a previous reading of 52.8.

Rob Dobson, Director at IHS Markit, commented that we should not be too optimistic, citing an unspectacular growth trend.

In the release, Rob Dobson of Markit said, “September saw a mild improvement in the performance of the UK manufacturing sector. Domestic market demand strengthened, while increased orders from North America and Europe helped new export business stage a modest recovery from August’s contraction. Business confidence also rose to a three-month high.”

UK head of manufacturing at Lloyds Bank Commercial Banking, Dave Atkinson, has commented on this morning’s positive PMI manufacturing figures:

“An increase in the PMI figure this month is welcome news for a sector grappling with an ongoing lack of clarity about the UK’s future trading relationship with the EU, escalating trade wars and rising commodity prices. Manufacturers across different sub-sectors are starting to react to the ever-increasing likelihood of a no-deal Brexit with a degree of nervousness. Announcements from major automotive firms in response to ongoing economic uncertainty and suppressed demand are signs it is creating unease.”

Chancellor Philip Hammond defended PM May’s Brexit plan in a 35-minute Conservative Party conference speech. Not only that, but he admitted that capitalism needs a reworking in the 21st century and accepted that it is the challenge for the future.

He stated that he would make sure that we had “enough fiscal firepower” to support the UK economy in the event of a no-deal Brexit. He challenged European Council president, Donald Tusk’s pessimism over Brexit, saying that “Our job is to prove him wrong.”

The Chancellor also promised to offer support and flexibility to businesses in terms of the apprenticeship levy and how it is spent. The Director General of British Chamber of Commerce, Adam Marshall, called on Hammond to go further in his support for businesses. He said: “His upcoming Budget must deliver bold action to boost investment and confidence at precisely the moment that our business communities need it most.”