Brexit at heart of Queen’s Speech

Without opposition 

Theresa May still does not have an agreement with the DUP, but the Queen’s Speech passed without opposition. As expected, Brexit was the focus of attention and future laws will be designed to ensure a ‘smooth and orderly’ exit from the EU. Of the 27 bills announced, eight relate to Brexit and its implications for key industries.

Grand Tory ambitions have been culled, as anticipated, after the Conservatives lost their majority in the recent General Election. Theresa May has promised to work with "humility and resolve "as she starts a “slimmed down” programme for the current Parliament. 

The Pound gets an unexpected boost

Elsewhere, the Bank of England's chief economist Andy Haldane has been speaking and he clearly does not share the same view on interest rates as Governor Mark Carney.

In a speech on Wednesday, Mr Haldane said that if inflation keeps rising faster than expected and global growth outpaces current forecasts then the current stance on interest rates may need to be reviewed. "I do think that beginning the process of withdrawing some of the incremental stimulus provided last August would be prudent moving into the second half of the year."

Split vote

The Monetary Policy Committee split their vote 5-3 at its June meeting last week when three members voted to raise interest rates. Crucially, Mr Haldane voted to keep borrowing costs on hold at that meeting. His current hawkish view contrasts with a speech Mr Carney gave on Tuesday when he said that now is not the time to increase the interest rate. 

It seems there is now a real possibility of an interest rate rise in the coming 12 months. Mr Haldane’s announcement gave the flagging pound a jolt and as a result GBP moved higher versus its main trading partners, albeit only to levels seen in recent days. On a relatively quiet trading day the pound began to lose some of these earlier gains as the day wore on.