Janet Mui: weekly economic update 25 October
There has been some political progress on a Brexit agreement, increasing the appeal of UK assets. In the eurozone, economic activity remains weak.
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- The UK Parliament has agreed on the broad principles of the EU withdrawal agreement. However, MPs have refused to allow the associated legislation to be fast-tracked.
- As a result, we think a Brexit extension now looks very likely. Betting markets suggest an election is also likely before the implementation of any Brexit deal.
- Eurozone PMI data has stabilized, but remains near six-year lows. Worryingly, there are signs that weakness in manufacturing may be spilling over into the services sector.
- Mario Draghi presided over his last meeting of the European Central Bank, with Christine Lagarde set to take over at the start of November. We do not expect further policy measures this year.
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