The Brexit saga rolls on with EU leaders scheduled to go into a two-day session in Brussels on Thursday on the heels of a potential third ballot on UK prime minister Theresa May’s deal in the House of Commons. The Bank of England and the US Federal Reserve are among several central banks to set monetary policy this week.
International trade secretary Liam Fox has suggested the third Commons vote on Mrs May’s Brexit deal could be pulled this week if the government does not trust it can succeed. The vote is predicted to take place on Tuesday or Wednesday if it does move forwards. The deal has been heavily defeated twice in the Commons after large-scale rebellions by Eurosceptic Conservative MPs and the steadfast hostility of the Democratic Unionist party’s 10 MPs. Mrs May has estimated that if she could win parliament’s backing for her deal this week, she would ask Brussels only for a three-month extension beyond the scheduled departure date of March 29, therefore bypassing any need to take part in the European elections.
BoE rate meeting
The BoE announces its interest-rate decision on Thursday. Expectations for any variation in policy are low and there will be no press conference or inflation report published alongside the decision. Still, traders, investors and economists will scrutinise the minutes of the Monetary Policy Committee’s decision for any signs of how Brexit affects the balance of risks confronting the UK economy. The global economic downturn and public shifts away from any further tightening of monetary policy from the European Central Bank and the Fed will further provide focuses for debate.
Fed rate meeting
Investors and economists are exceedingly confident that the US central bank will leave policy unchanged at this week’s monetary policy meeting, but there will nevertheless be lots to digest – not least minutiae of the Fed’s proposals for its multitrillion-dollar balance sheet. Officials will also revise their forecasts for interest rates, possibly lowering forecasts for further tightening this year amid a wait-and-see approach embraced in January. The Fed has signalled that it will be patient as it considers more interest rate increases, acknowledging muted inflation and slower economic growth.