Wednesday, January 16: Last night Theresa May was ever so unlucky, just missing out of MPs passing her Brexit deal through by 230 votes. This is the largest defeat for a sitting government in history. We now await a no-confidence vote and really have absolutely no idea what is going to happen. Regardless of the no-confidence vote’s outcome. Last night Theresa May said (do not read if you’re mid brew) “No-one can be in any doubt about the strength of this House of Commons as the fulcrum of our democracy”, no really. Presumably no psychiatrists have been watching the last 2 years.
As a result, the pound bounced with traders and investors seeing the latest development as a step closer to Brexit being delayed, a softer Brexit or no Brexit at all. Unfortunately, sterling won’t be running away on any kind of meaningful recovery soon. The reaction on the FTSE was a 0.5% decline today, as other European bourses moved higher, as we write Wall Street has begun its session with firm increases. Home builders certainly outperformed London shares as oil majors lagged, with Pearson leading declines.
House builders were buoyed from Bovis’ strong results, which showed profits for 2018 ahead of expectations as the group announced a hike to the dividend. Taylor Wimpey and Persimmon climbed over 5% on the ‘100 as Bovis shares climbed 3.8% on the ‘250.
Previously mentioned, Person, expects adjusted operating profit to beat expectations despite falling revenues which they have blamed on their key US higher-education business.
Elsewhere today we received the latest inflation data for the UK, which fell to nearly a two year low as a result of falling oil prices at the end of last year. The CPI measure fell to 2.1% during December from November’s 2.3%, in line with analysts’ expectations.