Apparently, in Foggy Albion, everything is very bad with entertainment, and this function was forced to assume the entire color of society in the face of the political elite of the United Kingdom. On Tuesday, Theresa May did bring to the parliament a "divorce" agreement with the European Union, which she vowed last year to finalize and achieve the economic part. But none of this was done and realizing that it smells like kerosene, she was able to receive from the head of the European Commission a promise to coordinate with all European countries the very notorious points of trade. But the British parliamentarians, as the true sons of the creators of the largest colonial empire in the history of mankind, are well aware of the price of promises to do something after the signing of the treaty. Their grandfathers and great-grandfathers repeatedly used this method to plunder entire continents, and they clearly did not want to be on the site of the victims, so the result of the vote was known in advance. And it is quite logical that the very next day, a number of parliamentarians demanded a vote on the issue of trust in the government because the Cabinet of Ministers is not able to resolve the issue with Brexit. However, this time, the parliament supported Theresa May, and only for the reason that quite a bit of time is left before the final date of secession from the European Union, and if early elections are held, the UK will go without fail according to a tough option, implying a complete lack of arrangements with Europe. It is precisely this that parliamentarians fear, and it is not just that they demand that the Prime Minister reach an agreement on this particular part. And by the end of the week, words began to sound about the possibility of postponing the withdrawal of the United Kingdom from the European Union to a later date. Some agreed right before the referendum. And naturally, the pound was thrown from side to side because of this, as if he were riding a roller coaster.
It's funny, but within a couple of hours after the vote in the British parliament on an agreement with Europe, Jean-Claude Juncker expressed his disappointment with its results, adding that the proposed option is the best that Europe can offer the UK. And this is despite the fact that literally the day before that he promised to intensify the coordination with the heads of the countries of the European Union namely the economic part of the agreement. Which is not in it to this day. It turns out that Europe is not going to include in the text of the agreement issues of trade and customs duties. In other words, that there is an agreement, that it does not exist, for the British economy there is no difference. Moreover, the negotiations have been going on for almost two years, but during this time there has been no progress on the most important issue as if it had not been discussed. It turns out that the Europeans are just pulling time, and since they have done it so well in recent years, the UK can knock out any delays for itself, but if she does not want to remember what duties and trade quotas are in Europe, then we need to cancel the referendum results. True, those politicians who will do this will sign the death sentence of their political career.
So the situation is completely unpredictable, and no one can say what will happen tomorrow. But it was precisely this that saved the pound from decline, unlike the single European currency, which gradually went down both under the pressure of inflation, which dropped from 1.9% to 1.6%, and thanks to the content of the text of the minutes of the European Central Bank meeting. The fact is that in words the representatives of the ECB promise that they will begin to consider the possibility of raising the refinancing rate by the end of spring, but the text of the protocol states that only if macroeconomic dynamics permits. And judging by inflation, this very dynamic will not give any resolution.
Also worth noting is the British statistics, which, of course, no one paid attention. And it is very eloquent, since inflation decreased from 2.3% to 2.1%, and the growth rate of retail sales slowed down from 3.4% to 3.0%.
It is clear that the theater of the absurd called "Disputes around Brexit" attracts all the attention to itself, but even without this interesting enough. In particular, the lockdown in the United States of America, which has already broken all records in its duration. However, apparently, this is of no interest to anyone, since government structures continue to work, and to the delight of taxpayers, without paying salaries to government employees. Of course, most congressmen are not particularly fond of Donald Trump, but they are well aware that this cannot last for long, and sooner or later this performance will begin to have a negative effect on the economy. However, this week there are only preliminary data on business activity indices, which should be reduced. And all at once. And this will necessarily be attributed to the shutdown, and not without reason.
In Europe, preliminary data on business activity indices will also be published, and forecasts for them are somewhat better than in the United States. And if the production index should remain unchanged, then in the services sector they expect good growth. But the main event of the week will be the meeting of the Board of the European Central Bank, and in the accompanying comment, everyone is waiting for instructions on the timing of the consideration of the possibility of raising the refinancing rate. Given the recent decline in inflation, you should not expect that the office of Mario Draghi will confidently announce the consideration of this issue in the spring. Most likely, there will be a streamlined formulation of risks and macroeconomic dynamics. In theory, this should have a negative impact on the single European currency, but investors already assume such a development of events, so no one will be particularly disappointed. Thus, given the negative data on business indices in the US and positive in Europe, it is worth waiting for the growth of the single European currency to 1.1450.
British politicians do not intend to stop at what has already been achieved and will continue to destroy the tender childish psyche of both investors and ordinary citizens. It is obvious that the topic with a repeated referendum will now be pushed. In addition, data on the labor market will be published, but they will not introduce any diversity since their dull stability is predicted. But the decline in the number of approved mortgage loans may well make many nervous because the real estate market is one of the main factors determining the investment attractiveness of the British economy. So the pound has every chance to meet the end of the working week at the level of 1.2775.
