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Markets shrug off Brexit blues, UK rate cut looms

Wednesday, July 13, 2016 - 01:51

Stock markets have traded within sight of their highest levels this year as the prospect of stimulative economic policy across the developed world eased immediate concern over Britain's vote to leave the European Union. David Pollard reports.

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(SOUNDBITE) (English) PRIME MINISTER DAVID CAMERON SAYING: "Other than one meeting this afternoon with Her Majesty The Queen, the diary for the rest of my day is remarkably light." David Cameron's parliamentary curtain call as prime minster. Funny - but perhaps no joke for those who see his Brexit legacy ostracising Britain from world trade. Only - not so many seem worried right now - at least not in the markets. (SOUNDBITE) (English) CHIEF ECONOMIC ADVISER, CEBR, VICKY PRYCE, SAYING: "Having a political vacuum is not good for the markets, people don't like that, they don't know who's going to be running the country next. At least now we know." If Theresa May's swift move into Downing Street as Cameron's successor is seen as a plus - so too is a promise of an end to austerity. That potentially a boost to the economy - as might be a so-called 'good Brexit'. And where France and Germany are in public opposed to easy terms for a UK trade deal, in private it could, markets hope, be different. (SOUNDBITE) (English) CHIEF ECONOMIC ADVISER, CEBR, VICKY PRYCE, SAYING: "If anything, I would assume that Merkel would be in favour of reaching some sort of reasonable agreement, because all her industries are telling her that they do value the relationship with the UK very significantly." Even sterling is edging back up after a 14 per cent drop in the wake of the Brexit referendum. A weak pound lifting export prospects - and that in turn lifting FTSE 100 share prices to their highest in nearly a year. Even more intoxicating is the prospect of further central bank stimulus. Further easing from the BoJ and ECB seen in the pipeline - and from the BoE as early as this week. That blotting out slower house prices, plunging consumer confidence and other warning telltales. UPSOT BANK OF ENGLAND GOVERNOR, MARK CARNEY After Cameron, this is the latest face that could change. Foreign minister Philip Hammond now hot favourite to become finance minister - of a UK where change is, still, a new normal.

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Markets shrug off Brexit blues, UK rate cut looms

Wednesday, July 13, 2016 - 01:51