Pound Rises as New Prime Minister Begins Work Today

The UK pound has continued to react positively to the coronation of Theresa May as Britain’s new Prime Minister, as she emerged as the only candidate to be the next leader of the Conservative Party on Monday, following the withdrawal from the race of her nearest challenger Andrea Leadsom.

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In the past 24 hours the GBP/USD rate has favoured sterling, growing from just below $1.30, rising to over $1.33 this morning GMT, as the political maneuvering has hitherto managed to stabilise the pound from falling further against the dollar. The British Pound is trading at 1.3276. FTSE 100 add 0.50% trading at 6645.50.

The market’s eyes will now be on who May will select to be in her administration, it is widely thought that the current Chancellor George Osborne will be forced out of his position, and that there will be a minister responsible purely for the negotiations in leaving the European Union (EU).

Observers will also keeping an eye on the balance of the new Prime Minister’s team, between those who wished to leave to EU, and the ones who voted to remain.

Industrial Production Down by 1.2% in Euro Area

Eurostat have found that industrial production in the euro area has fallen by 1.2% in May, a reverse of the figures for April, when industrial activity increased by 1.4%, for the whole of the EU, the figures were no more positive, as production also fell in May by 1.1%, whereas the bloc of 28 saw industrial business rise by 1.5% in the previous month.

Comparing May this year to May last year, industrial production increased by 0.5% in the euro area, and by 1.1% in the EU, although in both areas they are still way behind the level of output that was achieved before the onset of the 2008 financial crash.

The production of energy falling in the euro area and the EU by 4.3% and 3.3% respectively, was the main drag on industry in May, followed by reductions in capital goods, durable and non durable consumer goods also declined.

The largest decreases in industrial production were registered in the Netherlands at minus 7.8%, Portugal minus 4.4%, Greece minus 4.3%, while the largest increases were recorded in Lithuania by 3.9%, Latvia 2.4%, and Slovenia on 0.6%.

French Inflation Rises by 0.1% in June

Official figures have revealed that consumer prices rose in June by 0.1%, although this figure was down on the 0.4% inflation that was recorded for May, compared to June last year, the data was more positive as prices have hiked by 0.2%. Year on year, the latest inflation figures are the most encouraging that France has posted since January, matching the 0.2% rate that was disclosed then, the past four months have resulted in negative inflation between February and April, and a stable rate in May.

The increase in June in comparison to May, was mainly from the strengthening of petroleum products for the fourth month in a row, rising by 2.2%, as oil prices recovered.

Also, a seasonal rebound in prices of some services at the beginning of the summer, although this was partly offset by the seasonal decline in fresh food and manufactured product prices, which fell by 0.3%.